Slowdown in pay growth as weekly wages rise £16 in 14 years 

Average wages have risen by just £16 a week since 2010 when inflation is factored in, according to new research.

Think tank the Resolution Foundation said that workers have experienced an “unprecedented” pay squeeze in the past 14 years resulting from the financial crisis, Brexit and the current cost of living crisis.

Looking further back, average real wages grew by £145 a week in the previous 14 years (1996-2010).

While many countries have performed poorly on pay since 2010, the report says that the UK’s performance has been “particularly bad”. If UK wage growth had matched the level of Germany and the US, workers would be earning £3,600 more every year.

However, one positive aspect is better pay for low earners thanks to increases in the minimum wage. Real typical hourly pay for low-paying occupations such as cleaners, waiters, bar staff and shop assistants has grown by at least 20% since 2010, compared to typical pay growth across the workforce of 1.6%.

Wages have been rising faster than inflation in recent months, but this came after a period of almost two years in which the cost of goods was rising more quickly than pay.

Hannah Slaughter, senior economist at the Resolution Foundation, noted that the UK is “one of only a handful of countries” where employment has yet to return to pre-pandemic levels.

Assessing the manifesto proposals of the two main parties ahead of the general election, Slaughter added: “Both the main parties want stronger jobs growth over the next parliament, but offer very different approaches to achieving it. The Conservatives want to use carrots and sticks in the tax and benefits system, while Labour is prioritising career, skills and health support.

“The Conservatives’ business-as-usual approach to the minimum wage and employment rights stand in stark contrast to Labour’s plans for the biggest shake-up of the workplace in a generation. But while the big labour market challenges facing Britain offer reasons for bold new policies, the combined scale of these reforms means they should be implemented carefully and after consultation.”