Wages rising at just half the speed of inflation in final quarter of 2021
Working families facing “cost of living storm”, union body warns
TUC calls on government to intervene and work with unions to boost pay across the economy
UK workers face the worst Christmas wage squeeze in nearly a decade, according to new analysis published by the TUC today (Monday).
The analysis – of official statistics – reveals that real wages (that is, wages after the cost of living has been taken into account) in December 2021 are on course to be 0.8 per cent lower than in September 2021.
The TUC estimates that, in the last quarter of 2021, pay growth (+0.8 per cent) has risen at just half the speed of inflation (+1.6 per cent).
The union body says the final quarter of 2021 has been the worst final quarter for real wage growth since 2012 and the second worse since comparable records began 2000.
Cost of living storm
The squeeze on wages comes as many families brace themselves for a “cost of living storm” in 2022.
In addition to rising bills millions of working households have been hit by the cut to universal credit and will be hit next year by the hike to national insurance contributions.
Separate analysis by the Resolution Foundation estimates that the average household will be worse off by £1,000 next year as a result of soaring prices.
Get wages rising
The TUC says that ministers must come up with a long-term economic plan to get wages rising across the economy.
The TUC says that in addition to raising the minimum wage to at least £10 an hour, the government should work with unions and employers on sector-wide fair pay agreements, arguing that giving workers more bargaining power on pay is key to improving living standards.
The TUC warns that without action to boost pay packets, the squeeze on household budgets will continue for years to come.
TUC General Secretary Frances O’Grady said:
“People should be able to look forward to Christmas without having to worry about how they'll pay for it.
“But millions are facing a cost-of-living storm as bills soar and real pay falls. After more than a decade of wage stagnation, this is the last thing working families need.
"The government can’t sit this crisis out. We need a proper plan to get pay packets rising across the economy - or the squeeze on household budgets will continue.
“Ministers should get around the table with unions and employers now and work out fair pay agreements for every industry. That’s the best way to boost living standards and ease the pressure on households.”
- The Q4 annual weekly earnings figure is based on growth that will take the year to meet the OBR forecast for 2021 of 5 per cent.
The Q4 CPI quarterly growth figure is based on the Bank of England November forecast for four quarter growth of 4.3 per cent.
- The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.
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