Wages are rising… but only to what they were in 2009

Annual pay statistics show real terms average earnings are rising again – but only to levels seen in 2009.

Median weekly pay for full-time employees was £611 in April 2021, representing a 4.3 per cent increase from the same month in the previous year, according to the Office for National Statistics (ONS).

However, analysis from trade union TUC shows that even with a year-on-year rise in monetary value of pay, real average weekly earnings are actually the same as what they were in 2009.

Yes, 2009, back when Gordon Brown was prime minister, Barack Obama was inaugurated as the 44th president of the US, and the swine flu pandemic began. 

‘Real earnings’ were calculated by the TUC by looking at costs of living and living standards. 

Soaring prices and inflation across all of life’s essentials are amounting to what devolved nations’ leaders called a “cost of living crisis” in the UK.

“Because we’re living in such a terrible period for living standards, the value of wages are no different to what they were 12 years ago,” explained a TUC spokesperson. 

Supermarket prices increased by 1.1 per cent in August, the ONS said, while energy bills have risen steeply with concerns bills could rise by as much as £400 per year for some people.

Between 1997 and 2009, real pay grew by 24 per cent (£96 a week). Between 2009 and 2021 it didn’t grow at all.

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“Because public servants have had their pay frozen recently… public workers are still earning less today, in real terms, after inflation, than what they were a decade ago” the spokesperson continued.

Chancellor Rishi Sunak will use his budget speech to lift the pay freeze, which has been in place since November 2020 as a response to the pandemic. 

The news comes after the Treasury confirmed that the national minimum wage and living wage would go up from April 2022 – from £8.91 per hour to £9.50 for people aged 23 and above, and from £8.35 to £9.18 for 21 and 22-year-olds. 

Despite the 6.6 per cent increase being more than double the current 3.1 per cent rise, campaigners said that soaring costs of living including food and energy prices “massively outweighed” the increase.

The data also showed that among all employees the gender pay gap has increased from 14.9 per cent to 15.4 per cent, with the widest gap of 16.1 per cent being between high earners.

Although the gap is lower than it was in 2019, the COVID19 pandemic has widened pay disparity as men’s earnings have rebounded more quickly than women’s.

This “she-cession,” explains Duncan Brown, expert in in reward and HR consulting, is because women are the majority of people in low pay and keyworker roles such as catering or hospitality. Therefore it is they who have “taken the hardest hit on income and health from the pandemic.”

Campaign group Pregnant Then Screwed highlighted that the number of flexible working requests put in by mothers being rejected has significantly increased in the past year.

The ONS said that despite this outlier, the data is in line with the “downward trend of most recent years” of the gender pay gap continuing to decrease.

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