Hourly wages down in UK, up in Germany

Wages have gone up 2.7% over the last three years in Germany, and fallen 5.5% in the UK during the same period.

According to the Labour Party, which gathered data from the House of Commons library, the UK’s hourly wage fall, adjusted for inflation, is one of the steepest in the EU (European Union) – only the Netherlands, Portugal and Greece saw their wages shrink by more.

Even Spain and Cyprus, which presumably have worse economic problems than the United Kingdom, had hourly wage shrinkages of 3.3% and 3% respectively.

Hourly wages fell by an average of 0.7% in the European Union since mid-2010. The Labour Party wrote online:

“Analysis of Office for Budget Responsibility forecasts by the House of Commons Library shows that, after inflation, wages are forecast to be £1,520 lower in 2015 than in 2010. This means that working people will, on average, have lost a total of £6,660 in real terms while David Cameron has been Prime Minister.”

The Labour Party added that since mid-2010, the UK has seen prices rise more rapidly than in any other G7 country, while none of other G7 has seen wages fall in real terms by as much as in the UK.

Labour’s Shadow Financial Secretary to the Treasury, Chris Leslie MP, said “David Cameron will go down in history as a disastrous Prime Minister for people’s living standards. He is totally out of touch, his economic policies have failed and the result is working families are massively out of pocket.

By 2015, official forecasts show working people will have lost an average of £6,660 ($10,300) under five years of the Tories. Yet millionaires have got a huge tax cut from this Government.”

In France, over the same period, hourly wages rose by 0.4%. The Eurozone saw average wages drop by 0.1%. According to the Tories, the higher cost of living has been addressed by raising the tax-free personal allowance threshold. This threshold means that 2.7 million more people pay no income tax. The Institute for Fiscal Studies reported in June 2013:

“Average incomes fell for the second successive year in 2011–12. Official statistics recorded a reduction of 3% at the median (middle) and 2% at the mean, after accounting for inflation (measuring incomes before deducting housing costs, BHC). This comes on top of large falls in 2010–11, leaving median and mean income 6% and 7% below their 2009–10 peaks respectively.”

Hourly wages fell in public and private sector

According to the Institute for Fiscal Studies, average public-sector workers earned £15.80 ($24.51) per hour in 2011, compared to £16.60 ($25.75) in 2009. Average hourly wages in the private sector over the same period fell from £15.10 ($23.42) to £13.60 ($21.10).

The BBC quoted the GMB Union, which claimed that the UK government had been directly responsible for the drop in wages. If wages are low employers get taxpayer subsidies in the form of tax credits, the GMB Union explained. Then they can “make decent profit margins”.