UK wages face largest decline in EU

Wages in the UK have seen one of the largest falls in the European Union during the economic downturn, according to official figures.

Figures from the House of Commons Library show that average hourly wages have fallen 5.5 per cent since mid-2010, adjusted for inflation, which is the fourth-worst decline in the 27-nation bloc. Contrastively, German hourly wages rose by 2.7 per cent over the same period.

Across the European Union as a whole, average wages fell 0.7 per cent. Only Greek, Portuguese and Dutch workers have had a steeper decline in hourly wages, the figures showed.

Other countries that have suffered during the eurozone debt crisis also fared better than the UK. Spain had a 3.3 per cent drop in the same period and salaries in Cyprus fell by 3 per cent.

French workers saw a 0.4 per cent increase, while the 18 countries in the eurozone saw a 0.1 per cent drop during that period.

“These figures show the full scale of David Cameron’s cost of living crisis,” said Shadow Treasury Minister, Cathy Jamieson.

“Working people are not only worse off under the Tories; we’re also doing much worse than almost all other EU countries.

But the government says it has tackled the higher cost of living by raising the tax-free personal allowance threshold to £10,000, taking 2.7 million people out of tax, and other measures such as freezing fuel duty.

The GMB union said the government was “directly responsible” for the fall in wages.

“Employers paying low wages get taxpayer subsidies in the form of tax credits to assemble a workforce for them to make decent profit margins,” it said.

In June, the Institute for Fiscal Studies said a third of workers who stayed in the same job saw a wage cut or freeze between 2010 and 2011 amid a rise in the cost of living.

“The falls in nominal wages… during this recession are unprecedented,” the IFS said at the time.  

Source: BBC