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Bottom of the pile

After Greece, UK suffered biggest wages drop in Europe
Ryan Fletcher, Thursday, July 28th, 2016


British wages fell by 10.4 percent between 2007 and 2015 new TUC analysis has found, lower than anywhere else in Europe except Greece.

 

UK workers suffered the biggest drop in real wages amongst leading Organisation for Economic Development (OECD) countries. Out of the 29 OECD nations only Britain, Portugal and Greece saw wages fall.

 

Over the same eight year period, real wages in Poland grew by 23 percent. In Germany pay packets increased by 14 percent and in France by 11 percent. Wages throughout the OECD grew by an average of 6.7 percent.

 

The analysis – which used the OECD’s latest employment outlook – shows that although the UK’s employment rates have grown since the financial crash, employment in European countries such as Germany, Hungary and Poland have overtaken Britain’s by a significant margin, even as wages in those countries increased.

 

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’.

 

“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.”

 

O’Grady said investment was particularly necessary in the face of the economic uncertainty caused by Britain’s decision to leave the European Union.

 

“People cannot afford another hit to their pay packets,” she said. “Working people must not foot the bill for a Brexit downturn in the way they did for the bankers’ crash.”

 

Unite assistant general secretary Steve Turner said there were signs following the resignation of David Cameron and the removal of George Osborne, that the new Tory government might be considering a change of direction.

 

“The report shows that the politics of austerity presided over by the unlamented George Osborne have not worked –  austerity since 2010 has depressed wages and people’s living standards. Lack of spending power is holding back growth in the UK economy,” Turner said.

 

“It is clear that Britain needs a pay rise, especially following the economic uncertainty created by the Brexit vote, to make people more confident in the future and their ability to spend. Big corporates are sitting on cash mountains and they could well afford to be more generous on pay.

 

“Already the new chancellor Philip Hammond has indicated that the UK economy needs to be ‘reset’ – hopefully, this means loosening the corset of harsh spending and big welfare cuts.'”

 

 

 

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