The Office for National Statistics (ONS) has published the results of its Annual Survey of Hours and Earnings. The figures show that, in real terms, UK households are seeing their income drop by 3.5% as inflation outstrips pay rises.
In 2011, the median salary for a full-time worker rose by 1.4% to £26,244 and the overall growth in earnings, including part-time workers, was just 0.5%. By contrast, the Consumer Price Index (CPI) inflation rate was 5% or more.
High levels of unemployment and sluggish economic growth have seen the number of people in part-time work increase. 72,000 more people were working part-time in 2011 compared with the previous year, whilst there were 380,000 fewer people in full-time jobs.
Although the gender pay gap has been narrowed further, the rate at which this is happening has slowed down – the gap became £558 smaller in 2010, but just £179 smaller in 2011. If the rate remains as it is, it will take another 30 years for women to get the same pay as men.
The gap between rich and poor is widening, with falling income for some of the country’s lowest-paid workers combined with substantial salary hikes for directors in people in senior management.
Median earnings for directors and CEOs at leading companies rose by 15% to £112,157 – partly the result of a shift in emphasis from bonuses to basic pay. Senior corporate managers saw their salaries increased by 7.1% to £77,679.
At the other end of the spectrum, waiters and waitresses have experienced an 11.2% drop in annual earnings to £5,660, and cleaning staff are now paid 3.4% less than in 2010.
Brendan Barber, general secretary at the TUC, said the ONS data shows that the poor performance of the economy was primarily the result of a squeeze on wages. He said “falling wages and self-defeating austerity have been the main reasons for the UK’s economic woes, rather than a eurozone crisis which has yet to fully show up in official statistics.”
If you need debt management help because of the pressures of rising bills and falling wages, get in touch today.