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Saturday, June 10, 2023

UK wages failing to keep up with costs – Resolution Foundation

15 years of stagnant wages have made British workers £11,000 a year worse off, according to a study exclusively provided to BBC Panorama.

The figures come from the Resolution Foundation think tank, which focuses on low- to middle-income households.

It was also found that general household income in England lagged far behind in Germany. In 2008 the difference was just over £500 a year, now it’s £4,000.

The Treasury Department said the UK economy was more resilient than many had expected.

Chancellor Jeremy Hunt acknowledged in his budget speech last week that people’s finances are still under much pressure.

In recent months, wages have failed to keep pace with rising costs, meaning millions of Britons have effectively taken pay cuts.

But experts tell Panorama that the revenue problem goes back even further.

The Resolution Foundation has calculated that the average worker would earn £11,000 more a year if wages rose further than they are now, taking into account rising prices.

And an Ipsos poll of more than 6,000 adults found two-thirds of them believe the economy will worsen next year.

Lower wages than our neighbors
In the budget, Chancellor Jeremy Hunt said inflation, which measures how prices change over time, “destroys the value of hard-earned wages.”

The government claims the standard of living issue is due to price hikes caused by the war in Ukraine and the legacy of Covid.

But the roots of the cost of the living crisis go deeper.

So-called “real wages” have not grown sustainably for 15 years.

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