Real-term pay has plummeted for millions of workers, new Office for National Statistics (ONS) figures have revealed.
When taking inflation into account, total pay including bonuses dropped by 3.2%, while pay without bonuses decreased by 2.4%, in the period from November 2022 to January 2023.
According to the ONS, this is among “the largest falls in growth since comparable records began” in 2001, with a greater drop in real-term total pay last seen in February to April 2009.
In the private sector, average regular pay growth – without bonuses and without factoring in inflation – was 7%, while in the public sector this was 4.8%.
Jonathan Boys, senior labour market economist for the CIPD, the professional body for HR and people development, said: “Pay is still rising but prices are rising faster and each month the cost-of-living crisis casts more gloom on family finances. Though inflation is coming down, prices still rose by 10.1%, eclipsing today’s figures which show regular pay growing at 6.5%.
“A pattern that we are getting used to now is the gap between public and private sector pay. The former grew at just 4.8% while the latter grew by 7%. This will make recruitment and retention in the public sector harder as time goes on.”
The figures also showed that 220,000 working days were lost due to labour disputes in January 2023, a significant reduction from the 822,000 total in December 2022.
TUC general secretary Paul Nowak said: “Britain’s real wage slump continues. Working people can’t take much more of this. Families are being forced to choose between heating their homes and putting food on the table.
“It is no surprise that workers are having to take strike action to defend their living standards. Ministers should be focused on resolving all of the current public sector pay disputes.
“That means using tomorrow’s budget to boost public service investment – including staff pay. This would help ease the staffing crisis and lay the foundations for a stronger economy in the years ahead.”
