Wages have risen in the city and across the UK, but not as fast as inflation, which has hit a 40-year high of 9%.
Average earnings in April across the UK were around 3% less in real terms than the previous year, an analysis of Pay as You Earn (PAYE) data from the Office for National Statistics (ONS) shows.
This means the average UK worker is down £66 per month in real terms, compared with last year.
In Liverpool the average monthly earnings in April 2021 were £1,835 which rose to £1,927 in April 2022.
But allowing for inflation, workers suffered a 3.7% real-terms pay cut, with the average person £73 per month worse off.
Liverpool ranks 60th in the country for workers with the biggest real-term pay cuts.
Real-terms pay cuts on Merseyside
The ONS data is broken down to NUTS3 areas - a system used by the EU to divide Europe up into smaller segments.
The NUTS3 areas for Merseyside are: Liverpool, East Merseyside, Sefton and Wirral.
Workers in East Merseyside had an average wage of £1,886 in April 2021 and £2,005 in April 2022.
This means that people living in the NUTS3 area are £51 worse off a month - a real-terms pay cut of 2.5%.
East Merseyside ranked 145th nationally for the biggest pay cut.
In Sefton, the average wage in April 2021 was £1,839 which increased slightly to £1,970 in April 2022.
Workers in Sefton have suffered a 1.7% real-term pay cut with a loss of £34 a month - they ranked 174th nationally.
Wirral workers went from £1,864 in April 2021 to £1,979 in April 2022.
They have had a 2.6% real-terms pay cut which equates to £53 a month.
The Wirral ranked 136th nationally for locations with the largest pay cuts.
Liverpool is the only NUTS3 which has exceeded the national average as the UK as a whole has seen a 3.1% real terms wage cut - a loss of £66 a month.
What is causing this real-terms pay cut?
Spiralling food and energy prices mean that some people in the UK are earning as much as £153 per month less than this time last year.
According to the ONS, the rate of inflation as measured by the Consumer Price Index (CPI) hit 9% in April 2022, the highest since 1989.
This has been driven by increasing wholesale energy prices, and the knock on effect of these on production costs.
Sadly, inflation is likely to increase in coming months, with further rises in energy bills expected in October.
The Bank of England has predicted that CPI could reach 10.5% by the end of the year.
The Institute for Fiscal Studies (IFS) has warned the poorest 10 % of households, who spend a higher proportion of their income on gas and electricity currently face an even higher rate of inflation, around 10.9%.
The Government has said that global factors are driving inflation and warned that it “cannot protect people completely” from the resulting increases in the cost of living.
Some economists have suggested that increasing wages at the same level as inflation could provide a workable solution to rising costs.
But the Bank of England’s governor, Andrew Bailey, has called on workers not to push for large wage increases as a result of the cost of living crisis, over concerns this could fuel further inflation.
The Bank of England has responded to the crisis with increased interest rates - in the hopes that this will discourage borrowing and spending.