· News

Real wage growth in 45-year record decline

Real wage growth for UK workers declined 3% during 2022 according to research from the Trades Union Congress (TUC), the largest decline since 1977.

Workers lost £76 per month on average during the year as wages failed to keep up with record levels of inflation and the ongoing cost of living crisis. 

Public sector key workers were among the hardest hit in 2022. Nurses saw their real wages fall £1,800 over the last 12 months, while paramedics and midwives saw a £2,400 drop in real wages. 

Wages for UK workers:

Why does it feel like everyone is going on strike?

Average pay plummets as inflation bites

Wage stagnation threatens wellbeing of low-paid workers

Should we increase the minimum wage?

TUC general secretary Frances O'Grady said employers and unions should be working together.

Speaking to HR magazine, she said: "Britain's wages crisis is bad for workers and for the wider economy. We need to get more money into people's pockets so they can spend more in their local high streets and with local businesses. That's the best way to drive growth. A race to the bottom on pay is a zero-sum game – it will just delay our recovery from the recession and it is bad for business.

"Underpaid and undervalued workers vote with their feet, leaving key sectors facing acute staffing shortages. Employers should be getting around the table with unions to discuss how they can support staff during this cost of living emergency. If we want to have healthy, thriving workforces people need to be able to make a decent living."

Research from job site Indeed showed wage growth in the UK started to slow over the year; the figures show wage growth has dropped from 6.4% in June 2022 to 6.1% in December.

Martin Tiplady, CEO of Chameleon People Solutions, said employers could be on the receiving end of a backlash from employees as real wages continue to drop.

He told HR magazine: "In the current circumstances, employers will receive a backlash when the problem was not wholly or initially of their making. But the breaking of it may be in their gift. Those who are not reviewing their pay arrangements or being as generous as they might have heads in the sand. They will incur recruitment costs et al when that money might be better utilised.

"Other employers who are weighing up affordability are doing their best and might reap the benefit. Employers and HR need to take a long hard look at their costs – including senior remuneration – for it will be important to be seen to be doing the right thing as well as actually doing it."

Drawn out negotiations between employers and trade unions could make the situation even worse, Tiplady added.

He said: "This is the price of years of austerity – and something that will hang around for years – and a pretence that real wages are keeping pace. They have not.

"Much as I understand why the trade unions are doing what they are, I do not support the way they are going about it or holding the UK public to such inconvenience when the prospect of what they are demanding will be to prolong the situation even further."