Coming in at 103rd out of 119 countries in a global ranking tracking wage growth since the financial crisis, the UK placed above only a handful of countries, including Greece, Sri Lanka, Jamaica and Mexico.
The UK was one of only 21 countries where wages fell instead of rose in the seven years after the crisis, with Britons’ wages falling by an average of 1 per cent each year in real terms between 2008 and 2015.
Compared to many of its European neighbours, the UK fared extraordinarily poorly in wage growth – in Sweden, for example, wages grew on average by 1.8 per cent in real terms each year after 2008, in Germany, wages grew by nearly 1 per cent each year and in Switzerland wages also grew by 1 per cent.
With the exception of Greece, the UK was the lowest ranked European country in the chart of wage growth compiled by the TUC.
The TUC chart follows another analysis by the union confederation last year, which shows the UK matching Greece’s poor wage growth.
What is unique in the UK compared to the 29 developed countries in the Organisation of Economic Development (OECD) is the fact while wages have dropped tremendously, employment growth in the UK is above average.
The OECD argues that this “may be linked to the growth in jobs with low hours and intermittent work.
“Any decline in foreign direct investment in the UK that may result from Brexit could further worsen this poor productivity performance,” it warned in a report analysing the UK’s employment outlook.”
TUC general secretary Frances O’Grady argued that its latest analysis on wage growth shows that Britain is in desperate need of a pay rise.
‘Worst pay squeezes in world’
“UK workers suffered one of the worst pay squeezes in the world after the financial crash,” she said. “And with food prices and household bills shooting up again, another living standards crisis is a real danger.”
“The chancellor should end the pay restrictions on nurses, teachers and other key workers that are making them thousands of pounds poorer,” O’Grady added.
A new government survey published today (February 27) has found that of those enduring the worst of the UK’s collective pay squeeze – workers on the minimum wage – many are not educated about the laws governing their pay, leaving them open to exploitation from rogue bosses.
In the poll of more than 1,400 workers earning less than £15,000, nearly 70 per cent didn’t know that they should be paid for travel time between work assignments, and almost half believed that using tips to top up pay to the minimum wage was legal.
A significant majority – 57 per cent – also didn’t know that deducting money from their wages to cover the costs of their uniform is unlawful if it takes their earnings under the minimum wage.
The survey responses have prompted the department for business, energy and industrial strategy (BEIS) to launch a national advertising campaign endeavouring to educate more people about minimum wage laws.
The government ads will be posted on public transport, shopping centres and other public places in the run-up to April 1, when the minimum wage rises from £7.50 per hour for the top rate, up from the present rate of £7.20 an hour now.
“We are determined to make sure everybody in work receives a fair wage and while most employers get it right, there are still a small number who fail to play by the rules,” said business minister Margot James. “This campaign will raise awareness among the lowest paid people in society about what they must legally receive.
“Anyone who thinks they may be paid less than the legal minimum should contact Acas as soon as possible.”
Earlier this month, a record number of more than 450 employers were ‘named and shamed’ by the government for failing to pay more than 15,000 workers the legal minimum wage. Among the businesses paying less than the minimum were household names such as Argos and Debenhams.
Government must go further
Unite, however, has argued that the government must go well beyond a mere advertising campaign to tackle the growing problem of rogue bosses robbing wages from their employees.
“The government needs to crack down further on employers who failed to pay the national minimum wage to some of the most low-paid and vulnerable workers in the country,” said Unite assistant general secretary Steve Turner.
“The fact that the government has mounted only 13 prosecutions for non-compliance since 2007 is pathetic,” he added. “In America, bad bosses are jailed and heavily fined for ‘wage theft’ which is what this is, exploiting workers in such a shameful fashion.
Turner called for “proper resources for the agencies responsible for enforcement and the cuts they have suffered in recent years to be reversed.”
He described Britain’s bottom ranking in the wage growth analysis as “utterly shameful”.
“That the UK is the world’s sixth richest economy but wage growth since the financial crisis is nearly as low as in Greece is a national scandal,” Turner said.
He warned that as the UK extricates itself from the EU, a cost of living crisis looms as inflation is expected to pick up significantly.
“Let’s be under no illusions – rising inflation, coupled with persistent pay stagnation, is the ticking post-Brexit time bomb that will usher in an out-of-control cost of living crisis, with those who can least afford it suffering the most,” he said.
“But the government can take action to ensure that living standards don’t plummet and the economy isn’t wrecked in the process,” Turner added. “Ending the freeze on working-age benefits, along with ending the public sector pay cap and an immediate hike in the minimum wage are some of the key measures that can quell a cost of living crisis.
“Above all we need an end to austerity and public investment that creates jobs to get the economy going again.”