The average UK worker has seen their salary drop in real-terms by an average of 5% compared to less than two years ago, with staff in the financial services and construction sectors hardest hit.
According to research for the BBC’s Panorama programme, which is due to be screened on BBC1 tonight, the average worker earned £20,149 at the start of 2011, some £1,088 less than they took home in the middle of the recession.
The study was undertaken by the Centre for Economics and Business Studies and was based on data from payment processor Vocalink, which handles more than 90% of the deposits made into employees’ bank accounts.
It revealed that, if inflation, which is at a 20-year high, is taken into account, average take-home pay is actually lower today than it was in 2004. Some economists believe that pay has lagged behind inflation because the fear of unemployment has led many personnel to refrain from asking for even a modest pay rise.
Former monetary policy committee member David Blanchflower told the BBC: "One of the bleak things going on right now is that people are very fearful of losing their jobs. They’re worried about the austerity that’s coming and that’s especially true of people in the public sector."
Moreover, because company profits have been relatively low, the ability of firms to pay has prevented wages from rising, he added.
Employees in the financial services sector have been particularly badly hit, however. The average salary here is £101 per month lower than two years ago, while construction wages are £99 per month lower. Public sector renumeration has dropped by £45 per month, while retail wages are down £41.