'The UK is the fastest growing of any major advanced economy in the world,' George Osborne boasted in his Autumn Statement speech on Wednesday. Unfortunately wage growth is a different matter.
Figures released today by the International Labour Organisation show that, between 2010 and 2013, real wages in Britain fell faster than any other major economy in the G20. While Australia's citizens enjoyed wages worth 108.9% what they were earning in 2007, Britain's workers saw their real incomes fall by 7.1% to 92.9% of 2007 levels.
Credit: ILO
This is even worse than wages in Italy, Spain and Portugal, while supposedly struggling France's workers have seen wages increase 2.3% over the period in real terms. Spare a thought for the Greeks, though, where wages have fallen by almost a quarter.
It's worth noting that these average figures don't simply represent the average change in each worker's pay, but also the changing composition of the workforce. The creation of a lot of low paid jobs would result in a declining average, but that's better than not having a job at all.
Returning to France for instance, unemployment is at 10.4%, compared to 6% in the UK. Britain's 'flexible labour market' (i.e. its workforce's willingness to work for low pay) has been heralded for helping keep unemployment low, even it means accepting a measly pay packet.
That being so, the result of this is a class of low-wage workers who need to be subsidised by the Government in the form of in-work benefits in order to maintain a decent standard of living. The result is that these workers are, through no fault of their own, a weight on the public purse.
As Haymarket and MT founder and former deputy PM Lord Heseltine told a host of business leaders at our Most Admired Companies awards earlier this week, 'Huge numbers of people who work for your companies get substantial extra money because their wages are too low,' he said. 'This is costing the UK tens of billions of pounds.'
Perhaps it's time for the private sector to take up the slack.
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