Fresh research has revealed that no other developed economy has witnessed “such a marked decline” as the UK when it comes to negative wage growth.
This is according to TUC’s latest report on the global economic race published this week, which found that workers in the UK have suffered the biggest fall in real wages compared with workforces from the world’s top ten developed economies.
TUC General Secretary Frances O’Grady said: “This government’s blind obedience to self-defeating austerity has ensured that we are leading the way when it comes to the squeeze on living standards.
“While most countries have suffered periods of negative wage growth, no-one has witnessed such a marked decline as the UK.”
Between 2007 and 2011, real wages fell by 4.5% in the UK, reflecting an even tighter squeeze than the fall witnessed in Italy (-2.7%) and Japan (0.7%).
The bulk of the decline was seen in 2011, the government’s first year in office, as wages decreased by 3.5%. During this period, real wages in the UK declined at nearly twice the rate of Spain, the next worst-performing economy that year.
In a stark contrast to the gloomy financial circumstances of UK workers, wages in Australia and Canada rose by 6.9% and 5.4% respectively.
“Businesses desperately need people to spend money but employees are cutting back as their wages are squeezed. And the public sector, far from making up the gap, is being slashed too,” Ms O’Grady continued.
“Unless we get stronger economic growth with rising real wages consumer spending will remain weak and the economy will continue to flat-line.”
Further analysis of the ‘global race’ by the TUC revealed that the UK is also dragging its heel on exports, GDP growth and manufacturing compared with the majority of its G7 competitors.