Rising inflation, falling living standards and static pay fuel anxiety across all income bands, thinktank finds
Anxiety over future job and pay prospects has become entrenched among UK workers against a backdrop of falling living standards, Brexit uncertainty and the prospect of automation, a report has warned.
Four out of five working people are concerned that inflation will outstrip their pay in future, despite high levels of employment, the Royal Society of Arts, Manufactures and Commerce said.
The thinktank – whose chief executive, Matthew Taylor, recently led an employment review for the prime minister, Theresa May, – said anxiety about falling real pay was widespread across all income bands as it warned the link between employment and economic security had been “fundamentally broken” since the 2008 financial crash.
“Having a job is no longer a guarantor of economic security: more than 7 million people in working households live in poverty, wage growth lagged behind inflation for most of the last decade, and close to 8 million people in the UK live with problem debt,” said Atif Shafique, a senior researcher at the RSA.
“Ten years after the crash, and we need a step change. Community, place, identity and personal responsibility all have an important role to play,” he said.
The study of more than 2,000 adults, carried out by Populus for RSA, argues that a new focus on economic security is needed to meet working Britain’s challenges in the 2020s, as automation leaps forward. RSA also called for a universal basic income to complement paid work, providing everyone with a means to save.
Frances O’Grady, the general secretary of the TUC, said the pay crisis in Britain should be the government’s first priority.
“Working people are in the middle of the longest pay squeeze since Napoleonic times, with real wages still lower than before the financial crisis,” she said.
The financial crisis took a heavy toll on UK living standards, as prices roses faster than wages in the six years from 2008. Following a brief respite in 2015 and 2016, falling real pay returned in 2017 as the sharp fall in the value of the pound, triggered by the Brexit vote, drove up the cost of imported goods and fed higher inflation.
Inflation rose from 0.5% in June 2016 – the month of the referendum – to 3.1% in November. Wage growth has failed to keep pace, despite low unemployment, and was 2.3% in October.
The TUC said its own analysis of figures from the Office for National Statistics found that while UK corporate profitability rose to 12.6% in 2017 from 11.4% in 2007, real wages over the same period fell by 4.4%.
“Working people aren’t getting their fair share. Profitability is up, but real wages are still in freefall,” O’Grady said. “Not only does Britain deserve a pay rise, but this evidence shows that business can afford it too.”
Article from the 'BBC'