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Pay packets worth less than 2008 in nearly two-thirds of UK local authorities – TUC analysis reveals

Pay packets are still worth less than in 2008 in nearly two-thirds (63%) of UK local authorities, according to new TUC analysis, published yesterday (Monday). 

  • Real wages still below 2008 level in 212 out of 340 UK local authorities
  • TUC says longest pay squeeze in modern era is a “damning indictment” of the Conservatives’ economic record
  • Wage performance in every corner of Britain is well below historic trends, analysis shows
  • Average UK worker would be £200 a week better off if real wages had grown at pre-crisis rate

The analysis of official statistics shows that 16 years on from the global financial crisis, wages are set to be lower – in real terms – in 212 out of 340 UK local authorities in 2024.

And in every UK local authority, real wages are far below where they would be if they had grown at the pre-2008 growth rate.

London has the highest share of real wage blackspots – with real pay lower than in 2008 in nearly all (94%) of its local authorities.

However, even in lower-paid regions of the UK like the North East – where incomes of those on the very lowest pay have been pushed by the minimum wage – real wages are still lower than in 2008 in half (50%) of local authorities.

Unprecedented pay squeeze

The TUC described the findings as a “damning indictment” of the Conservatives’ economic record.

Millions of UK workers are currently enduring the longest pay squeeze in more than 200 years.

Not since Napoleonic times has there been such a sustained period of wage stagnation.

The analysis shows that even in areas where real wages are higher than in 2008 pay growth is way below historic trends.

The union body estimates that the average UK worker would be £10,400 a year better off if real wages had grown at their pre-crisis trend – the equivalent of £200 a week.

Before the financial crash UK real weekly wages grew on average by 1.7% each year. Since 2008, average annual growth has been –0.2%.

Political failure

The UK has one of the worst records among OECD nations for pay growth since the financial crisis.

When the Conservatives took office in 2010, a wage recovery was already underway. However, it went into reverse when the Conservatives hit the UK with their austerity programme, including real terms pay cuts across the public sector.

TUC General Secretary Paul Nowak yesterday said:

“Hard work should pay for everyone. But people are still worse off than in 2008 across the vast majority of Britain. And in every corner of the UK pay growth is way below historic trends.

“This is a damning indictment of the Conservatives’ economic record. This is the same government that’s given us the most dramatic fall in living standards on record.

“The Tories failure to grow the economy – and their scorched-earth austerity policies – has decimated family budgets. Just imagine how much better off people would be if they had an extra £10,400 in their pay packets each year – and how much more prosperous the country would be.

“It doesn’t have to be this way. We can create a new era of decent pay growth again where families’ living standards rise rather than falling backwards.

“But we need a new approach to get there. That means a proper plan to get the economy growing again by investing in UK industry, and a New Deal so that working people get a fair share of the wealth they create.”

Editors Note’s

Region

Number of LAs with real wages below 2008 level*

 % of LAs with real wages below 2008 level*

North East

6

50%

North West

22

67%

Yorkshire and Humber

10

67%

West Midlands

13

43%

East Midlands

22

67%

East of England

26

60%

London

30

94%

South East

50

78%

South West

15

58%

England

194

68%

UK

212

62%


*For which data is available

TUC analysis: The TUC analysis is based on local authority pay data from the Annual Survey of Hours and Earnings (ASHE) for the period between 1997 and 2023. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/placeofresidencebylocalauthorityashetable8

For 2024 pay data, the OBR forecasts for real wage growth from the March 2024 economic and fiscal outlook have been applied to the 2023 pay figures: https://obr.uk/efo/economic-and-fiscal-outlook-march-2024/

Real wage change in each nation, region, and local authority was calculated by finding the difference between median real gross weekly pay in each area between 2008 and 2024.

2008 wages were adjusted to take inflation into account (CPI, 2024=100). The latest OBR forecasts are used for 2024 inflation. Percentage change was calculated to show change from the 2008 figure. 

The full results also compare the 2024 real wage values with the level wages would have reached if real pay growth since 2008 had matched the average rate in the years prior to the financial crisis (the period 1997, when this pay data begins, to 2008). The average annual real pay growth between 1997 and 2008 was 1.7%.

A small number of local authorities are excluded from the analysis because of either boundary changes or because the full data needed is not available. They are: Cumberland UA, Westmorland and Furness UA, North Northamptonshire UA, West Northamptonshire UA, East Suffolk, West Suffolk, City of London, Isles of Scilly, Orkney Islands, and Shetland Islands.

OECD comparison: OECD data on wages is based on national accounts rather than the type of earnings survey conducted by the Office for National Statistics that is used in this analysis. It is not as accurate as the ONS survey, but it allows for comparisons between countries, as some nations do not conduct earnings surveys in the same way as the ONS. Under this approach, the UK shows a very small improvement in real wages from pre-financial crisis peak in 2007 to 2022 (the most recent year for which data for international comparisons is available). And it shows that the UK is in 27th place out of 34 OECD nations for wage growth across this period.

 

Original article link: https://www.tuc.org.uk/news/pay-packets-worth-less-2008-nearly-two-thirds-uk-local-authorities-tuc-analysis-reveals

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