Thursday, November 24, 2016

More gloom on the wage front

British workers face a "dreadful" decade with no real wage growth and yet more austerity, the Institute for Fiscal Studies, a respected think-tank has warned. Real wages will remain below pre-recession levels until 2021 - the longest period of stagnation since the Second World War. The Institute for Fiscal Studies said workers would earn less in real wages in 2021 than they did in 2008.

It also said the UK is in line for "an additional dollop of austerity" in the 2020s.

IFS director Paul Johnson said: "One cannot stress enough how dreadful that is - more than a decade without real earnings growth. We have certainly not seen a period remotely like it in the last 70 years."

"This has, for sure, been the worst decade for living standards certainly since the last war and probably since the 1920s. We have seen no increase in average incomes so far and it does not look like we are going to get much of an increase over the next four or five years either."

Real average earnings - which factor in the rising cost of living - were forecast to rise by less than 5% between now and 2021. That forecast is 3.7% lower than was projected in March.
"Half of the wage growth projected for the next five years back in March is not now projected to happen. On these projections real wages will, remarkably, still be below their 2008 levels in 2021,"

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