Nine more years of pay squeezes, says TUC

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The value of take-home pay will not fully recover until 2021, with UK workers in the middle of a 12-year “wage dive”, the TUC has claimed.

A TUC analysis of government pay data has found that wages have fallen sharply in real terms during the past three years, failing to keep up with the cost of living.

According to XpertHR, pay awards have tracked below the retail prices index (RPI) since December 2009.

XpertHR’s latest pay trends report found that pay settlements were edging closer to inflation, with the median pay award just 0.5% behind RPI, but this is only due to inflation falling.

The TUC’s analysis, based on forecasts from the Office for Budget Responsibility, found that, while wages are likely to catch up with inflation in 2013, the value of pay packets will not reach pre-recession levels for another nine years.

It estimates that, by the time wages have recovered, the average worker will have lost a total of around £8,500.

TUC general secretary Brendan Barber said: “The dire state of the economy has pushed down wages. Workers today are, on average, nearly £1,600 poorer than they were three years ago.

“Even when wages start to pick up again, it will take years to undo the damage wreaked by austerity and high inflation. Unless things change, the UK’s 12-year wage dive will continue until 2021.”

The TUC analysis found that the biggest hit to the value of real incomes came last year, when RPI was 3.2% higher than the growth in average earnings, costing workers around £1,500.

Find the latest pay trends data, including individual figures for the public, private and manufacturing sectors on XpertHR.

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