Shrinking wages 'hitting standards'

12:21am Tuesday 11th June 2013

© Press Association 2014

Billions of pounds are being lost from local economies because of job losses and cuts in wages, according to a new study.

The TUC said the UK's pay packet was £52 billion smaller last year compared to the eve of the recession in 2007, with some regions suffering 10% losses.

The union organisation said a fall in the real value of wages, reduced hours and changes in employment, such as more part-time working, had caused the reduction.

The North West has been hit by the biggest cut in pay between 2007 and last year - a fall of over 10% - followed by the South West, West Midlands and Scotland, said the report.

A modest increase in employment had failed to offset a "sharp" cut in wages in recent years, said the TUC.

General secretary Frances O'Grady said: "Over the last five years, people have taken a massive hit in their pay packets, while millions more have had to reduce their hours or take lower paid work. Many people have lost their jobs altogether.

"Taken together, our pay and jobs crises have shrunk Britain's total annual pay packet by more than £50 billion. It's no wonder businesses are struggling when so much demand has been sucked out of the economy.

"Britain's shrinking wages are hitting people's living standards, holding back businesses and damaging our growth prospects. Britain desperately needs a pay rise.

"While economic growth is the key challenge facing the UK today, the years running up to the crash taught us that growth without wage gains just creates more unsustainable debt.

"Employers and both local and central governments need to recognise the importance of decent wages in delivering sustainable economic growth. They can start by becoming living wage employers and being more transparent about their pay systems."

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