TUC warns of wage stagnation within middle and low-income jobs

News Article - 15 June 2011
Category: Business

Employees in middle and low-income jobs have experienced very little improvement in wages in over 30 years, according to a report from the Trades Union Congress (TUC).

In particular, low-income workers have seen their wages rise by 27 per cent in real terms over the last 30 years. However, the top 10 per cent of wage earners have enjoyed increases of up to four times that amount, underlining a "sharp divide" between professions.

The report, named " The Livelihood Crisis" by Stewart Lansley, suggests there has been steady growth in what Lansley describes as "bad jobs", which provide low wages and minimal job security.

Despite the national economy doubling in size a significant proportion of workers have received little if any financial benefit for decades.

Brendan Barber, TUC general secretary, said: "People often cite the recession as the source of this income squeeze but a livelihood crisis has been brewing in Britain for decades.

"The financial crash has exposed decades of limp wage growth offset by soaring household debt."

Consequently Mr Barber has called for a radical transformation of the nation's economy.

"Unless we radically transform our economy - from recasting the role of the state to prioritising a fairer distribution of new wealth and jobs - we will simply be storing up more problems for the future," he said.

Nevertheless, Mervyn King, Bank of England governor, stated at the turn of the year that a pay squeeze was "necessary" in order to combat rising inflation. Higher import prices, energy prices and an increase in VAT have been introduced to rebalance the economy.

King also insisted that the Bank would move to thwart attempts by wage-setters to keep up with rising commodity prices.

"Further rises in world commodity and energy prices cannot be ruled out. Attempts to resist their implications for real take-home pay by pushing up wages would require a response [from the Bank's monetary policy committee]," he said.

Article keywords: Trade Union Congress, TUC, wage stagnation, Stewart Lansley, Brendan Barber, Mervyn King, Bank of England, inflation, VAT rate rise

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