Gregg, P., Machin, Stephen 
ORCID: 0009-0004-8130-2701 and Fernandez-Salgado, M.
(2014)
The squeeze on real wages - and what it might take to end it.
National Institute Economic Review, 228 (1).
R3-R16.
ISSN 0027-9501
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.
| Item Type: | Article |
|---|---|
| Official URL: | http://ner.sagepub.com/ |
| Additional Information: | © 2014 National Institute of Economic and Social Research |
| Divisions: | Centre for Economic Performance |
| Subjects: | H Social Sciences > HC Economic History and Conditions |
| Date Deposited: | 21 May 2014 14:15 |
| Last Modified: | 25 Oct 2024 13:48 |
| URI: | http://eprints.lse.ac.uk/id/eprint/56810 |
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