Wednesday, August 22, 2018

Stagnant wages despite economic growth

 Wages have been stagnating over the last decade despite a jump in the number of people in employment, according to new figures from the Resolution FoundationThe think-tank found that people in the poorest third of UK households make up more than half of the increase in employment seen since the beginning of the financial crisis.

Of a 2.1 million increase in employment between 2008-2009 and 2016-2017, 1.2 million came from the bottom third of households in terms of income, with 360,000 added in the middle third and 540,000 in the top. However, the foundation said that while higher employment had given a boost to living standards, this was offset by “widespread insecurity” with 800,000 workers still on zero hours contracts. The think tank said there was also a “dire performance on pay”, with real average earnings still £13 a week lower than they were a decade ago.

Official figures published earlier this month showing that wage growth fell unexpectedly in June, in spite of a reduced unemployment rate, and come one day after the government reported its biggest budget surplus in 18 years. In July the Resolution Foundation said the incomes of the poorest households in the UK had slumped last year due to benefit cuts and rising inflation, leading to the largest rise in poverty since Margaret Thatcher was in power.

“But while employment is at a record high, Britain is still some way off full employment and too much work remains low paid and insecure. With fewer than half of people with a disability or ill health currently in work, targeted support for these groups holds the key to achieving further employment progress,” said Stephen Clarke, senior economic analyst at the Resolution Foundation.

The TUC’s general secretary Frances O’Grady said: “It’s taking wages longer to recover from this crash than it did after the Great Depression. The government is turning a blind eye to Britain’s living standards crisis. Ministers must get wages rising faster now.”

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