The average worker will lose around £6,000 by 2014 as a result of wages failing to keep pace with rising prices, according to new TUC (Trade Union Congress) analysis .
The latest inflation figures show that average earnings have now been trailing rising prices for three years. The TUC has calculated that a worker on a median salary of around £25,000 has already lost nearly £4,000 since December 2009, when earnings first fell behind prices.
Real wage growth was expected to return in 2013. However, in its latest update last December, the Office for Budget Responsibility put its forecast for real wage growth back until 2014.
With real wages now expected to fall for another year, the average worker is set to lose a further £2,000 in 2013, bringing the total wage loss to £6,000 by the time earnings finally start to rise at the same rate as prices in 2014.
The total wage loss is even worse for public sector workers, who have seen their pay frozen for the last few years and will see wage rises capped at just one per cent for a further two years, says the TUC.
TUC General Secretary Frances O’Grady said: ‘People have been getting poorer for the last three years and unless we see a sudden upsurge in economic activity it looks like the pain is set to continue.
“The average worker has already lost £4,000 and could lose another £2,000 this year. This massive squeeze on earnings, combined with sharp cuts to vital welfare benefits and tax credits, is hurting millions of people with food, transport and energy bills taking up an even larger share of family budgets.
“We urgently need decent wage rises, which will feed through into more consumer spending and wider economic growth. But with the government still committed to self-defeating austerity, the prospect of a return to healthy pay rises is looking further and further away
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