UK ‘at the bottom of the wage table’ states TUC

The UK’s Trade Union Centre (TUC) has revealed that in the past eight years, real wages in the UK have fallen by 10.4%.

This is the biggest fall in real wages since the financial crisis for any other advanced Organisation for Economic Cooperation and Development (OECD) country apart from Greece, and leaves the UK equal bottom in a league table of wage growth.

The analysis also shows that while the UK has increased employment rates since the economic crisis, over that same time period (2007–2015), real wages grew in other countries such as Poland, Germany, France, and on average real wages across the OECD increased by 6.7%. The UK, Greece and Portugal were the only three OECD countries which saw real wages fall.

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, said of the findings: “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.

“It’s therefore important for businesses to look at alternative ways of keeping their employees happy. We are seeing many organisations get better at aligning their pay and rewards strategies with the motivational and cultural needs of the modern workforce, which is key. However, businesses also need to consider implementing social recognition, which enables everyone in the company – not just managers – to recognise an employee’s ongoing work achievements and positive behaviours. With a proven return of investment, implementing peer-to-peer feedback allows employees to be consistently recognised for their efforts, which creates a more engaged, dedicated workforce that allows them to see the value that they add to their colleagues and the entire organisation – something money simply cannot buy.”