The TUC used figures from the Organisation for Economic Cooperation and Development (OECD) to examine the period between 2007 and 2015The UK has the dubious honour of demonstrating a larger decrease in real salaries since the financial meltdown than any advanced nation other than Greece.
This unsettling trend, which was revealed in research released by the UK’s Trades Union Congress (TUC), saw wages decreasing by more than 10 per cent since the financial crisis of 2007. This put the UK – along with Greece – on the lowest rung of a league table setting out growth in real earnings (wages for work taking inflation into account).
The TUC used figures from the Organisation for Economic Cooperation and Development (OECD) to examine the period between 2007 and 2015. In this time, it was discovered that real wages grew on average across OECD member countries by 6.7 per cent. In France wages increased by 11 per cent, in Germany by 14 per cent and in Poland by 23 per cent.
Apart from the UK, real income decreased in Portugal and – of course – Greece. Frances O’Grady, general secretary of the TUC, said the research emphasised that finances in many households were under strain even before the Brexit vote. Ms O’Grady had supported the campaign to remain in the EU.
Ms O’Grady said that incomes plunged after the monetary crisis of 2007 and wages had barely started to climb again. She added that ordinary people could not afford to see their salaries decrease again to pay for another downturn catalysed by Brexit.
The TUC recommended that the government acts to bump up investment and generate jobs with better pay. Incomes over the past two years have been increasing at a faster pace than the cost of living, as inflation dropped due to the oil price crash; however, Brexit poses a new threat to household finances.
The Treasury, however, stated that the TUC research did not accurately reflect the financial situation for most households, which were also affected by modifications to benefits and taxes. It also said that the unemployment figures had been decreasing since 2008, when the economy was mired in the most severe recession since the second world war.
The TUC analysis did not address the increasing employment rate, the Treasury added, saying that UK employment had risen more than any of the other country in the G7 after the financial crisis. It also said that incomes were rising at a faster pace than prices and that living standards had improved. The Treasury pointed out that these benefits would be supported by the new initiative of the national living wage.
The Institute for Fiscal Studies (IFS) said that the extended duration of the downturn subsequent to the financial crisis had made the recession of 2008 and 2009 quite noteworthy, along with the interim directly after. The IFS, which examines living standards, said that real incomes had decreased since the financial crash and had not recovered, which was extremely unusual both internationally and for the UK.
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