Five questions answered on longest real wages drop for 50 years

How long have real wages been dropping?

Figures from the Office for National Statistic (ONS) reveal real wages have experienced the longest consecutive drop for 50 years. We answer five questions on the drop in real wages.

How long have real wages been dropping?

They’ve been dropping consistently since 2010, which is the longest period of consecutive depletion since 1964, according to official figures. Overall, real wages have fallen by 2.2 per cent annually since the first three months of 2010.

How are real wages calculated?

Real wages are essentially wages that have been adjusted to factor in the cost of living or with inflation taken into account.

Why are real wages falling?

ONS said reduced output and shorter working hours were to blame. For example, many employees were asked to work shorter hours during the financial crisis rather than making them redundant.

The response to the fall in productivity in 2008 and 2009 was the main reason behind the fall in real wages, it added. It also highlighted the different inflation rate that exists between what is produced and what is consumed.

Are real time wages set to recover soon?

ONS said most recent figures, those released in the third quarter of 2013, showed real wages fell by a drop of 1.5 per cent compared with the same period a year earlier; showing that wages are still continuing to fall.

The Institute for Fiscal Studies produced a report on Thursday which also painted a strained picture. It suggested a mid-range household's income between 2013 and 2014 was 6 per cent below its pre-crisis peak. It added that real wages would not recover before the next general election.

What have the experts said?

"Over the last four years British workers have suffered an unprecedented real wage squeeze," said TUC General Secretary Frances O'Grady told the BBC.

"Even more worryingly, average pay rises have got weaker in every decade since the 1980s, despite increases in productivity, growth and profits. Unless things change, the 2010s could be the first ever decade of falling wages.

"A return to business as usual may only bring modest pay growth. We need radical economic reform to give hard-working people the pay rises they deserve."

For most people in Britain, wages have been dropping. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

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Scottish Labour's defeat to the Tories confirms a political transformation

The defining divide is no longer between left and right but between unionist and nationalist.

It was Scotland where Labour's recovery was supposed to begin. Jeremy Corbyn's allies predicted that his brand of left-wing, anti-austerity politics would dent the SNP's hegemony. After becoming leader, Corbyn pledged that winning north of the border would be one of his greatest priorities. 

But in the first major elections of his leadership, it has proved to be Labour's greatest failure. A result that was long thought unthinkable has come to pass: the Conservatives have finished second (winning 31 seats). For the first time since the 1910 election, Labour has finished third (winning 24). Scottish Labour leader Kezia Dugdale stood on a left-wing platform, outflanking the SNP on tax (pledging to raise the top rate to 50p and increase the basic rate by 1p), promising to spend more on public services and opposing the renewal of Trident. But rather than advancing, the party merely retreated.

Its fate confirms how Scottish politics has been realigned. The defining divide is no longer between left and right but between unionist and nationalist. With the SNP as the only major pro-independence party, the Tories, led by the pugnacious Ruth Davidson, framed themselves as the pro-UK alternative - and prospered. In contrast, Dugdale refused to rule out supporting a second referendum and suggested that MPs and MSPs would be free to campaign for secession. The result was that Scottish Labour was left looking dangerously irrelevant. "Identity politics. Labour doesn't get it," a shadow minister told me. Its socialist pitch counted for little in a country that remains ideologically closer to England than thought. The SNP has lost its majority (denying it a mandate for a second referendum) - an outcome that the electoral system was always designed to make impossible. But its rule remains unthreatened. 

Corbyn's critics will seek to pin the baleful result on him. "We turned left and followed Jeremy's politics in Scotland, which far from solving our problems, pushed us into third," a senior opponent told me. But others will contend that a still more left-wing leader, such as Neil Findlay, is needed. Dugdale is personally supportive of Trident and was critical of Corbyn before his election. Should she be displaced, the party will be forced to elect its sixth leader in less than five years. But no one is so short-sighted as to believe that one person can revive the party's fortunes. Some Corbyn critics believe that a UK-wide recovery is a precondition of recovery north of the border. At this juncture, they say, SNP defectors would look anew at the party as they contemplate the role that Scottish MPs could play in a Westminster government. But under Corbyn, having become the first opposition to lose local election seats since 1985, it is yet further from power. 

In Scotland, the question now haunting Labour is not merely how it recovers - but whether it ever can. 

George Eaton is political editor of the New Statesman.