The chart below provides some context to this, it uses data from the Bank of England’s Three Centuries of Data spreadsheet to show inflation (in this case CPI), wage growth and real wage growth from 1855 to 2009.
We are now in our fourth year of falling real wages, something which hasn’t happened since the ’70s. The 1870s that is.
The last real wage squeeze of this duration seems to have been 1875-1878.
This is why the TUC’s latest campaign is entitled, Britain Needs a Pay Rise.