Real wages: What recovery?

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UK article only


The world’s biggest economic problem

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Real wages


Workers continue to feel the pinch

DESPITE headwinds from the continent, Britain’s economy continues to do pretty well. GDP has exceeded forecasts so far this year, and in the second quarter was 3.1% larger than a year ago. The economy has at last surpassed its pre-crisis peak. Yet working Britons are not feeling the benefit. Real wages have fallen for seven consecutive years, and are 6.9% below their 2007 level. Britain is experiencing its longest period of pay stagnation since records began in 1855 (see chart).
On October 18th, 90,000 workers took to London’s streets to join a protest organised by the Trades Union Congress (TUC). Participants bemoaned not just pay stagnation, but also inequality: FTSE 100 chief executives now typically earn 120 times as much as their average employee, up from 47 times as much in 2000, according to Incomes Data Services, a research company. On October 20th the Social Mobility and Child Poverty Commission, headed by Alan …

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