Real wages fall could cost average worker £6,000
The average worker could lose around £6,000 by 2014 as a result of the real wage fall, according to analysis by TUC.
As wages fail to keep pace with inflation, the TUC calculate that someone on a median salary of around £25,000 has already lost nearly £4,000 since December 2009.
The Office for Budget Responsibility has put back estimates for when growth will return to real wages to 2014.
The TUC say government caps on benefits and tax credits will further depress growth. General secretary Frances O’Grady said: “The average worker has already lost £4,000 and could lose another £2,000 this year. This massive squeeze on earnings, combined with sharp cuts to vital welfare benefits and tax credits, is hurting millions of people with food, transport and energy bills taking up an even larger share of family budgets.
“We urgently need decent wage rises, which will feed through into more consumer spending and wider economic growth. But with the government still committed to self-defeating austerity, the prospect of a return to healthy pay rises is looking further and further away.”
Late last year, the ONS released data that showed rising wage inequality between the country’s top and bottom earners.