27 July 2016
Real wages fell by a massive 10.4% between 2007 and 2015, a drop matched only by Greece.
This is according to new research from the TUC, which showed that while employment rates are up since the financial crisis, real wages have declined at the highest rate in Europe.
Countries such as Germany and Poland experienced much higher growth in jobs than the UK, and real wages increased in parallel, up 23% in Poland and 14% in Germany.
Real wages grew on average 6.7% across the OECD countries, and only two other nations saw a fall: Greece and Portugal – both of which are countries that were nailed out by the Troika following the collapse of their economies: a situation the UK never faced.
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.”
Indeed, the Institute of Employment Rights backs an alternative and progressive economic structure following the vote to leave Europe, and has cautioned against doubling down on harmful austerity policies that hit the poorest hardest.
In our new Manifesto for Labour Law, we propose the reinstatement of a Ministry of Labour, sectoral collective bargaining, and the repeal of laws that prohibit trade union activity.
Britain suffers from the largest wage inequality in Europe, but we can close the enormous pay gap by allowing workers to negotiate with employers over terms and conditions at a sectoral and enterprise level, rather than allowing bosses to impose terms unilaterally.
The UK has also hit a record low in terms of economic productivity compared with the other G7 countries – our main competitors. By incentivising employers to compete based on innovation, rather than through lowering their labour costs, we will be better able to compete on the global stage. Indeed, this view is taken even by the Tory’s Head of Policy.
“Other countries have shown that it is possible to increase employment and living standards at the same time,” Frances O’Grady stated.
We have researched European economic and labour models to learn from their achievements and create a plan for British workers: Read and support our Manifesto for Labour Law.