By . Hugo Duncan . PUBLISHED: . 19:39 EST, 31 January 2014 . | . UPDATED: . 19:40 EST, 31 January 2014 . British workers have suffered the longest squeeze on their incomes for at least 50 years, official figures showed yesterday. The Office for National Statistics said average wages have fallen 2.2 per cent a year since the start of 2010 after inflation is taken into account. The four-year slump in ‘real wages’ is the longest since records began in 1964 and will fuel the political row over the so-called ‘cost of living crisis’ facing millions of families across the UK. Worry: The new figures showed that wages have been falling for four consecutive years - the longest since records began in 1964 . Household finances have been squeezed by subdued wage rises or even pay freezes at a time when the cost of essentials such as food and fuel has soared. Living standards look set to be a key political battleground between now and the general election in May 2015 with ministers hoping that the worst may now be over. But the ONS said it is ‘difficult to conclude that there has yet been a break from the trend of falling real wage growth’ following a drop of 1.5 per cent between the third quarter of 2012 and the same period of 2013. It followed a report by the Institute for Fiscal Studies showing the average family has an income today which is lower than it was 13 years ago. The IFS said living standards have ‘fallen dramatically since the recession’ as family’s incomes have ‘failed to keep pace’ with the rising cost of living. Labour seized on the reports and branded the government ‘out of touch’. But the ONS said the ‘key driver’ behind the fall in real wages was the fallout from the financial crisis of 2008 and 2009 when Labour was still in power. It pointed to the ‘fall in productivity’ during the recession and the increase in part-time work as employers asked staff to reduce their hours rather than making them redundant. The ONS report also showed that wage growth has been weakening for decades. Real wage growth averaged 2.9 per cent a year in the 1970s and 1980s but fell to 1.5 per cent in the 1990s and 1.2 per cent in the 2000s before dropping to minus 2.2 per cent since the start of 2010. ‘The recent period appears to be the latest stage in a series of step-changes in annual real wage growth,’ the ONS report said. Squeezed: Real wages have fallen 2.2 per cent since 2010, the Office of National Statistics said . David Cameron’s official spokesman said: ‘Should we deplore the fact that Britain has been made poorer as a result of the great recession of 2008/09 and as a result of the financial crisis? ‘The Prime Minister has been very clear about the mistakes that were made at the time and the long-term economic plan which the Government has had to put in place to address it.’ Labour MP Chris Leslie, shadow chief secretary to the Treasury, said: ‘While working people are worse off under David Cameron he has chosen this time to give the richest one per cent of earners a huge tax cut. ‘Labour will act to ensure we earn our way to higher living standards for all and tackle the cost-of-living crisis.’ TUC general secretary Frances O’Grady said: ‘Over the last four years British workers have suffered an unprecedented real wage squeeze. ‘Worryingly, average pay rises have been getter weaker in every decade since the 1980s, despite increases in productivity, growth and profits. Unless things change, the 2010s could be the first ever decade of falling wages. ‘A return to business as usual may only bring modest pay growth. We need radical economic reform to give hard-working people the pay rises they deserve.’ Andrew Hunter, co-founder of jobs website Adzuna, said: ‘The recovery in the jobs market is far from over. The great news is unemployment has fallen at record levels, but wages are still stuck in a post-recession hangover - while the backlog of employees waiting for the right time to change jobs is clearing, salary levels are yet to catch up. ‘Compared with this time last year, there are fewer people fighting it out for each position, but the chances of securing a decent salary have become slimmer.’
Figures show wages have slumped, when inflation is taken into account .
Report by the Office for National Statistics show that wage slump is the greatest since records began .
By . Hugo Duncan . PUBLISHED: . 19:39 EST, 31 January 2014 . | . UPDATED: . 19:40 EST, 31 January 2014 . British workers have suffered the longest squeeze on their incomes for at least 50 years, official figures showed yesterday. The Office for National Statistics said average wages have fallen 2.2 per cent a year since the start of 2010 after inflation is taken into account. The four-year slump in ‘real wages’ is the longest since records began in 1964 and will fuel the political row over the so-called ‘cost of living crisis’ facing millions of families across the UK. Worry: The new figures showed that wages have been falling for four consecutive years - the longest since records began in 1964 . Household finances have been squeezed by subdued wage rises or even pay freezes at a time when the cost of essentials such as food and fuel has soared. Living standards look set to be a key political battleground between now and the general election in May 2015 with ministers hoping that the worst may now be over. But the ONS said it is ‘difficult to conclude that there has yet been a break from the trend of falling real wage growth’ following a drop of 1.5 per cent between the third quarter of 2012 and the same period of 2013. It followed a report by the Institute for Fiscal Studies showing the average family has an income today which is lower than it was 13 years ago. The IFS said living standards have ‘fallen dramatically since the recession’ as family’s incomes have ‘failed to keep pace’ with the rising cost of living. Labour seized on the reports and branded the government ‘out of touch’. But the ONS said the ‘key driver’ behind the fall in real wages was the fallout from the financial crisis of 2008 and 2009 when Labour was still in power. It pointed to the ‘fall in productivity’ during the recession and the increase in part-time work as employers asked staff to reduce their hours rather than making them redundant. The ONS report also showed that wage growth has been weakening for decades. Real wage growth averaged 2.9 per cent a year in the 1970s and 1980s but fell to 1.5 per cent in the 1990s and 1.2 per cent in the 2000s before dropping to minus 2.2 per cent since the start of 2010. ‘The recent period appears to be the latest stage in a series of step-changes in annual real wage growth,’ the ONS report said. Squeezed: Real wages have fallen 2.2 per cent since 2010, the Office of National Statistics said . David Cameron’s official spokesman said: ‘Should we deplore the fact that Britain has been made poorer as a result of the great recession of 2008/09 and as a result of the financial crisis? ‘The Prime Minister has been very clear about the mistakes that were made at the time and the long-term economic plan which the Government has had to put in place to address it.’ Labour MP Chris Leslie, shadow chief secretary to the Treasury, said: ‘While working people are worse off under David Cameron he has chosen this time to give the richest one per cent of earners a huge tax cut. ‘Labour will act to ensure we earn our way to higher living standards for all and tackle the cost-of-living crisis.’ TUC general secretary Frances O’Grady said: ‘Over the last four years British workers have suffered an unprecedented real wage squeeze. ‘Worryingly, average pay rises have been getter weaker in every decade since the 1980s, despite increases in productivity, growth and profits. Unless things change, the 2010s could be the first ever decade of falling wages. ‘A return to business as usual may only bring modest pay growth. We need radical economic reform to give hard-working people the pay rises they deserve.’ Andrew Hunter, co-founder of jobs website Adzuna, said: ‘The recovery in the jobs market is far from over. The great news is unemployment has fallen at record levels, but wages are still stuck in a post-recession hangover - while the backlog of employees waiting for the right time to change jobs is clearing, salary levels are yet to catch up. ‘Compared with this time last year, there are fewer people fighting it out for each position, but the chances of securing a decent salary have become slimmer.’
Office for National Statistics said average wages of 2010 after inflation is taken into account. the longest since records began in 1964 .