North East pay packets have fallen by 5%

North East pay packets are shrinking by 5% according to new TUC analysis which shows the region’s overall earnings has dropped by over £1bn.

The figures show that on the eve of the recession in 2007 workers in the region were earning a total of £24.3bn (in 2012 prices).

However despite a rise in employment of 3,000 jobs, a combination of falling real wages, reduced hours and changes in the kind of jobs people are doing has reduced the North East’s total pay packet by five per cent over the last five years.

This equates to an annual cut of £1.2bn in 2012, with the North East’s overall pay packet falling to £23.0bn last year.

The figures, published to launch the TUC’s new campaign ‘Britain Needs A Pay Rise, show that Britain’s overall pay packet has fallen by 7.5 per cent, down over £52bn in 2012 compared to before the recession.

The TUC have pinned the fall in total pay packets on three factors, wages failing to keep pace with inflation, a shift towards reduced working hours, including part-time work, and the replacement of middle and relatively well-paid jobs, particularly in the public sector, with lower paid jobs in the private sector.

The organisation are now campaigning for higher wages across the private and public sectors and claim that raising the nation’s pay packet will help the economy if wage gains are spread evenly across the country.

Northern TUC Regional Secretary Kevin Rowan said: “The North East economy has suffered massively as result of Britain’s living standards crisis.

“Falling pay packets have stopped people from spending money in shops and on local services. That in turn has held businesses back and prevented them from creating new jobs.

“Rising prices, job losses, under-employment and people being forced to take low-paid jobs have all driven down wages in the region.

“If we are to build a sustainable recovery we need local authorities and central government to recognise that fair pay is essential.

“We need more living wage employers in the region and more transparency over pay systems. This is why Britain needs a pay rise.”