A report by TUC reveals that real wages in the UK have fallen significantly
The UK’s Trade Union Centre (TUC) has reported that in the past eight years, UK workers have suffered the biggest fall in real wages among leading OECD countries. The analysis found that real wages in the UK have fallen by 10.4%.
Apart from Greece, this is the biggest fall in real wages since the financial crisis than any other advanced OECD (The Organisation for Economic Co-operation and Development) country and leaves the UK equal bottom in a league table of wage growth.
During that same period, real wages grew in other European countries such as Poland (23%), Germany (14%) and France (11%). On average, real wages across the OECD increased by 6.7%.
Commenting on the figures, TUC General Secretary Frances O’Grady said: “Wages fell off the cliff after the financial crisis, and have barely begun to recover. As the Bank of England recently argued, the majority of UK households have endured a ‘lost decade of income’. People cannot afford another hit to their pay packets. Working people must not foot the bill for a Brexit downturn in the way they did for the bankers’ crash.
“This analysis shows why the government needs to invest in large infrastructure projects to create more decent, well-paid jobs. Other countries have shown that it is possible to increase employment and living standards at the same time.”
Derek Irvine, vice president of client strategy and consulting at Globoforce, also commented: “With a consistent drop in wages, businesses in the UK are facing a continuous battle to keep a workforce motivated and engaged. Furthermore, with Brexit looming, there is even more uncertainty about future job earnings.
“Whilst before the financial crisis, businesses often relied on boosting wage packets to increase productivity and reduce staff turnover, this has changed over the last eight years. The good news is that, while wages are certainly an important part of working, for many employees, loyalty isn’t linked to money, but to feeling valued.
“To improve motivation, businesses need to focus less on basic needs such as pay and more on boosting morale, motivation, and belonging. When staff feel underappreciated, then are likely to become increasingly unproductive and disengaged – both from their work and company – which can lead to them moving elsewhere.”