Wages continue to rise above inflation but majority of workers poorer than 15 years ago

Warehouse worker using hand pallet trucks loading cargo for shipping logistics depot products from shelf storage.

Responding to the new Labour market overview December 2023 released by the Office for National Statistics, Ben Harrison, Director of the Work Foundation at Lancaster University, said:

“Today’s limited data release shows workers have seen real pay grow by 1.4% on the year as wages continue to rise above inflation. This strong wage growth risks hiding the fact that the majority of workers are poorer than in 2008, and the Office for Budget Responsibility have warned real wages will not return to those levels until 2028.

“With a slowdown in hiring as vacancies falling for the 17th consecutive quarter to 949,000 and economic inactivity holding steady at 20.9%, we may see the strong levels of wage growth subside quickly in the New Year. This could be particularly bad news for workers in sectors such as construction, where pay growth is only just above inflation.

“At the Autumn Statement, the Chancellor announced further ‘carrot and stick’ measures to get people with long-term health conditions back to work. Due to data limitations, we have had no new insight on the levels of inactivity due to long-term sickness in the UK since September – which had hit a record 2.6 million people.

Given new measures could see benefits withdrawn from those with long-term health conditions and disabilities if they are unable to find a job within 18 months, it is vital the Office for National Statistics revert to normal service so the impact that both the rhetoric and policy measures have on some of the most vulnerable people in society can be analysed.”

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