Real wage and productivity stagnation

Machin, Stephen ORCID: 0009-0004-8130-2701 (2025) Real wage and productivity stagnation. Oxford Review of Economic Policy. ISSN 0266-903X (In Press)

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Abstract

The UK’s economic performance since the global financial crisis has seen real wage growth stagnating for over fifteen years and weak productivity growth with most, but not all, of the wage stagnation overlapping with the productivity slowdown. This paper studies these stagnation patterns in detail for the UK, and places them in international context where the country does not fare well as it both drops down wage and productivity growth rankings across countries. There has been a longer term decline in the influence of labour market institutions in affecting worker wages as the changing balance of power between workers and employers has played a role in the emerging wedge between wage and productivity growth in the stagnation period. The paper concludes with a policy related discussion of possible sources where sustained wage growth could re-emerge, and thereby generate improvements in living standards, in the future.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
JEL classification:	J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc. J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy J - Labor and Demographic Economics > J4 - Particular Labor Markets > J42 - Monopsony; Segmented Labor Markets J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
Date Deposited:	18 Mar 2025 15:39
Last Modified:	24 Mar 2025 10:06
URI:	http://eprints.lse.ac.uk/id/eprint/127594

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