Britain sits at the bottom of the league for pay growth among the world’s seven advanced economies.
New research from the TUC has found that workers in Britain are set to face the most severe real wage drop among G7 countries.
Based of figures from the Organisation for Economic Cooperation and Development (OCED), the TUC says that between 2022 and 2023, average real wages in the UK will fall by £1,750.
The TUC has consistently called to increase the national minimum wage to £10 a hour. It says ministers must come up with long-term strategies to get wages rising across the economy more generally. The union body is also asking the government to work with unions and employers on sector-wide fair pay agreements to improve living standards.
City bonuses rising six times faster than wages
In June, the TUC published analysis that shows City bonuses for high-paid executives are rising six times faster than wages. The data, based on ONS figures, showed that bonuses in the financial and insurance sector grow by 27.9% over the last year, six times faster than average wages in the same period, which increased by 4.2%.
In response to the analysis, the union body called for measures to clamp down on excessive bonuses and increase wages, saying there is “no justification for such obscene City bonuses at the best of times – let alone during a cost-of-living crisis.”
Whilst high-paid City execs enjoy hefty bonuses, the latest TUC research suggests people in Britain are facing the “longest and harshest pay squeeze in modern history.”
The G7 comprises of seven of the world’s advanced economies including the UK, Germany, Canada, France, Italy, Japan, and the US. The ‘group of seven’ dominate global trade and the international financial system. As real terms pay growth is “stagnant” at home, the TUC predicts that pay growth will bounce back faster in France, Germany, Italy, the United States, Canada and Japan.
Johnson backtracks on high-wage economy promises
At the Conservative Party conference in October, Boris Johnson promised to create a “high-wage, high-wage economy.” Several months later, the government told workers to accept lower pay and Johnson’s promise of a high-wage economy was labelled a ‘cruel joke.’
TUC general secretary Frances O’Grady said stagnant wages have left the low-paid cruelly exposed to the cost-of-living crisis.
“Making ends meet shouldn’t be a battle, but UK workers are suffering the worst pay squeeze in the G7 and the longest in modern history.
“Having repeatedly promised a high-wage economy, the Conservatives have consigned Britain to the bottom of the league for pay growth.
“Years of standstill wages have left households brutally exposed to this cost-of-living crisis,” said O’Grady.
Meanwhile, warnings have been made by Tory opponents and economists that the tax cuts the Tory leadership candidates are promising will blow a hole in public finances and could lead to rampant inflation.
Rather than cutting taxes, Frances O’Grady says the number one priority for Tory leadership candidates should be to get pay rising across the economy.
“This is the best way to give people long-term financial security and to stop families lurching from crisis to crisis,” said the TUC general secretary.
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward