From the TUC

What’s happening to earnings?

13 Aug 2015, by in Labour market

This is one of those ‘one chart says it all’ posts. Yesterday I was too busy looking at the regular labour market figures from the Office for National Statistics to notice they’d also published a Supplementary Analysis of Average Weekly Earnings. It’s well worth a read, and this chart is taken from page 2.

Earnings 2

The yellow line shows how the cash value of average weekly earnings (AWE) has grown since 2000. The blue line does the same for real AWE – after taking inflation (as measured by the Consumer Price Index) into account.

It’s true that real AWE has been rising, but this chart puts it in perspective – it’s the small kink up on the right. And it shows clearly that we’ve got a long way to go to get back to the real value earnings had in 2008. It certainly doesn’t justify Iain Duncan Smith’s boasting that “hardworking people will see a real difference in their pay packets”.

I’ll finish with a chart I’ve got after fiddling with the ONS data. Before the recession, real AWE was rising at about 1.7 per cent a year. Here’s what it would have looked like if it had continued to do so after 2008:

Earnings 3