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TUC: Wage stagnation to continue

Workers will have to wait another nine years to get back to the level of income they enjoyed in 2009, according to the Trades Union Congress.

Workers will have to wait another nine years to get back to the level of income they enjoyed in 2009, during which time they'll have lost an average of £8,500 in real terms wage losses, according to the Trades Union Congress (TUC).

The TUC research, which tracks wage and inflation data between 2009 and 2012, suggests that UK workers are just a quarter of the way through the UK's 12-year wage dive.

Incomes have fallen sharply in real terms over the last three years, as wages have failed to keep up with the rising cost of living.

The poor state of the economy has kept pay down, with wages frozen across the public sector and in many struggling businesses, finds the research.

This tough economic climate, combined with higher-than-forecast inflation, has meant that a worker on a median salary of £25,800 in 2009 has lost around £1,600 over the last three years.

The Office for Budget Responsibility (OBR) predicts that wages will continue to get smaller until 2013, and that real wage growth after that point will be very weak, growing by just 0.5 per cent a year in real terms after 2015.

The TUC has calculated that, based on current OBR forecasts, workers will have to wait until 2021 to get back to the level of income they had in 2009 with the average wage loss for workers over this 12-year wage dive more than £8,500.

Stronger wage rises for workers on all incomes – not just those at the top – is essential for a sustainable economic recovery, adds the organisation.

Greater support and investment in growing industries, a wider reach for collective pay negotiations, an end to attacks on employment rights and a reversal of self-defeating austerity would all help to deliver higher wages, it adds.

TUC general secretary Brendan Barber says, 'Ordinary workers did not benefit enough from the proceeds of growth in the run up to the crash as profits were hoarded by shareholders and top executives. A return to business as usual will simply postpone the next living standards crisis.

'It is clear that austerity isn't working. We need a new economic approach that delivers for all workers and their families.'

See also: TUC advises openness in pay practices

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