Average wages have fallen by 3%, their fastest decline since records began in 2001, new figures show.
The Office for National Statistics said annual growth in average pay rose to 4.7% in the three months to June against a backdrop of low unemployment and high job vacancies, while total pay including bonuses grew by 5.1 per cent.
However, once inflation is taken into account, the figures show the average workers’ salary has fallen for the 9th consecutive month.
And with the effects of last year’s furlough adding around 0.5 percentage points to measures of annual pay growth, the true scale of Britain’s pay squeeze is even deeper than official figures suggest.
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Ben Harrison of the Work Foundation, a think tank based at Lancaster University, said that those in the most insecure jobs were close to being out of options with what to do next to tackle the rising cost of living.
He said: “The six million workers in severely insecure jobs will be hardest hit and are already running out of options. Many have already tried to find more hours work and cutback spending but continue to face great uncertainty.
“With fuel bills about to soar again, hardworking families cannot wait any longer. The prime minister must return from holiday and agree a comprehensive package of support with the two Conservative leadership candidates.”
Inflation is currently at a 40-year high of 9.4%, meaning the impact of lower wages will feel more severe.
The ONS also found that the number of people in full-time employment has risen. The number of part-time workers had been on the rise since early last year, recovering from the large falls in the early stages of the Covid pandemic, but fell again between April and June.
Unemployment remained at 3.8% in the three months leading up to June, close to the lowest levels since the 1970s. However, the number of job vacancies dropped for the first time since summer 2020, which shows there is lower hiring demand.
Matthew Percival, CBI director of employment, said: “Employers are doing their level best to support staff through this period, but the vast majority can’t afford large enough pay rises to keep up with inflation.
“The incoming government will need to add greater flexibility to the apprenticeship levy, review the Shortage Occupation List and aligning skills gaps with education and training.”
While vacancy levels have fallen from record highs, the jobs market remains active, with almost a million (948,000) people moving jobs in the last three months, well above typical levels of around 700,000.
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