What is happening to the nation’s income levels?

The Trades Union Congress (TUC) has recently argued that Brits are experiencing the longest squeeze on their wages in real terms since the 1870s.

According to the TUC, the situation will not see a turnaround until Brits are able to access better jobs, with access to healthier pay increases.

This tale of doom and gloom has also been played out in a number of surveys. Recent research by Engage Mutual Assurance revealed that almost half (46%) of those surveyed aren’t able to stretch out their income until payday, with 19% turning to friends and family to make ends meet.

A recent report from the government-backed Money Advice Service (MAS) also highlighted that 18 million Brits see their funds run dry before pay day.

These figures may have been exacerbated by the fact that hourly income has plummeted by 6% in real terms since the last piece of research was carried out by MAS.

So despite the economy taking a 0.6% upturn, it seems that wage levels have yet to see uplift. As a result it seems natural to ask, ‘what exactly is happening to the nation’s income levels?’

Value of minimum wage has fallen in real terms

A study conducted by the Resolution Foundation has revealed that the minimum wage is not what it once was, as spiralling inflation has reduced its value in real terms.

As the minimum wage is failing to keep pace with inflation, the Foundation has argued that it no longer allows workers to meet basic living standards.

“Although extreme, exploitatively low pay has been nearly abolished, one in five workers still earn below £7.49 an hour (two thirds of median pay), just £13,600 a year for working full-time and too little to afford a basic standard of living,” the report outlined.

The view that the minimum wage is no longer useful is shared by Professor Sir George Bain, the first chairman of the Low Pay Commission, which recommends minimum wage levels each year. Speaking to the Independent, Professor Bain argued that a ‘fresh approach’ was needed as the minimum wage was addressing current issues.

Just days after the 15th anniversary of the minimum wage (July 31st), the UK’s largest employment union, Unite, called for the minimum wage to be increased by £1.50 an hour. Unite also argued that the full national minimum wage rate should be paid to those workers under the age of 21.

Unite general secretary Len McCluskey said: “If we had a government with any imagination, it would raise the current rate of the national minimum wage by £1.50 an hour. This would be an excellent way to celebrate the NMW’s 15th birthday.

“This would help raise workers out of the poverty wages that mean-spirited bosses insist on paying. It would also put money into wallets and purses, and increase spending power in the nation’s high streets.”

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Almost a third of women are now the main breadwinners

More than two million women are now the family’s main breadwinner, according to a report by the Institute for Public Policy Research thinktank.

This figure has increased by a staggering 80% over the last 15 years, meaning that 30% of women bring home the largest share of income in their households.

The report also revealed that the employment rate amongst single mothers, who are included in the above figures, has also climbed from 43% to 58%.

The highest proportion of female breadwinners is located in Scotland (32%), followed by Wales (31%) and the North of England (31%).

Commenting on the research findings, IPPR associate director Dalia Ben-Galim said: “The balance between bread-winning and caring has changed; it can no longer be assumed that the dad is the primary bread-winner in a couple family. As women’s employment outside the home rises, dual-earner couples are more common.”

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Posted by: Nicola Severn Categories: Finance Tags: , , Comments Off on What is happening to the nation’s income levels?

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