Monday, 30 January 2012

All in this together? Shrinking wage pool costs workers £60bn a year

Families in the UK are taking home £60bn a year less (in today's money) than workers did 30 years ago.

That's the findings of the latest TUC Touchstone Extra pamphlet All In this Together? which looks at how the recession and ongoing economic weakness has had an impact on different parts of the workforce.

The report shows that earnings took a sharp hit during the recession - dropping from an average increase of 4.2 per cent in 2007 to just 1.7 per cent in 2009, and there has been no post-crash rebound. In September 2011, nearly two years on from the end of the recession, 99 per cent of pay deals were below RPI inflation

At the same time the pay gap between executives and their staff has continued to widen, the report shows. While in 2000 the ratio of FTSE 100 top executive to typical employee pay stood at 47:1, by 2011 it had risen to 102:1.

The only group of workers immune from the UK's shrinking wage pool have been top execs who have weathered the recession and stock market falls to receive median pay increases of 10 per cent in 2010 and 17 per cent in 2011.

Commenting on the report,TUC General Secretary Brendan Barber said: 'Over the last three decades workers have become more productive and yet they have been rewarded with an ever smaller share of the wealth they've created.

'The tens of billions of pounds that workers miss out on each year has been papered over by rising credit card bills and a housing boom, but the financial crash has brought home the reality of our shrinking wage pool to millions of workers and their families.

He added:'Our current squeeze on living standards could be alleviated if the share of our national wealth that goes on wages started to return to the levels seen three decades ago.

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