Earnings now at same level as 2002 for squeezed middle

Real earnings have declined since 2009 and are at the same level as 2002.

Average earnings are now at the level as they were in 2002/3, and real incomes have declined for three consecutive years since 2009, a report out today has found.

In the seven years to 2009, UK employees’ median hourly earnings grew by 3.7% a year on average.

But since 2009 there has been a sharp fall in earnings for three consecutive years due to pay freezes and economic restructuring, the report by the Office for National Statistics (OFS) says.

There was an average drop in real pay of nearly 3% in 2010-12.

For those working in London, male full-time employees earned £15.54 per hour on average in 2012 compared with £16.14 in real terms in 2002 – a drop of 4%.

And the report says that while the government’s June 2010 Budget announced a two-year pay freeze for public sector employees starting in 2011/12, full-time public sector workers’ average earnings had started to decline before the pay freeze began, although the report says private sector workers have been hit harder since 2009.

From 2010 to 2012, the decline in median real earnings averaged 2.1% per year for full-time male public sector workers in the UK compared with 3.1% per year for their private sector counterparts.

The self-employed were the worst hit of all, with a 16% drop in median real income between 2007/08 and 2010/11 for the UK as a whole and a drop of a whole third for those working in London.

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