Worrying signs for workers as real term wages drop 2.2 per cent in lead up to 2013

New research from the Office for National Statistics shows real term wages dropped 2.2 per cent in the three years to 2013.

News of healthy growth for UK GDP, job creation and annual salaries has caused many Brits to look to the future with a high degree of optimism. However, when taking the rising cost of living into account, it seems that any of their financial gains have been minimal at best.

As reported by freshbusinessthinking.com, a person's real wage is their annual salary after the cost of living and inflation has been taken into consideration.

In its latest report, titled 'An Examination of Falling Real Wages', the ONS showed growth in real time wages slowing to 1.2 per cent during the 2000s before dropping by 2.2 per cent a year between Q1 of 2010 and Q2 of 2013.

This was far from the case during the 1970s and 1980s, when real time wages rose by 2.9 per cent per year. It went on to drop to just 1.5 per cent in the 1990s and has since been on a downward spiral.

Frances O'Grady, general secretary at the Trades Union Congress (TUC), says this gradual slump has taken its toll on everyday workers.

“Over the last four years British workers have suffered an unprecedented real wage squeeze,” she told cipd.co.uk. “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.”