The Squeeze on Real Wages – and what it Might take to End it

Paul Gregg, Stephen Machin and Mariña Fernández-Salgado

National Institute Economic Review, 2014, vol. 228, R3-R16

Abstract: UK workers have been experiencing unprecedented falls in real wages and living standards. Taking a balanced view of the available data suggests that since 2008 real weekly wages have fallen by around 8 per cent, which amounts to a fall in annual earnings of about £2000 for the typical (median) worker. Three factors are important drivers of these unprecedented real wage falls. First, unemployment has been exerting a larger downward pressure on wages than in previous recessions. Second, low wages and low business investment have created the conditions for an extremely poor productivity record through both the recession and recovery, though this has been good news for jobs. Third, and pre-dating the recession, due to rising inequality the wages of typical British workers are no longer keeping up with productivity gains made in the economy. If sustained increases in real wages are to occur, this requires a return to strong productivity growth and a re-coupling of median wages to productivity.

Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:nierev:v:228:y:2014:i::p:r3-r16_11

Access Statistics for this article

More articles in National Institute Economic Review from National Institute of Economic and Social Research Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK. Contact information at EDIRC.
Bibliographic data for series maintained by Kirk Stebbing ().