UK wages fall at fastest pace on record as Liverpool workers continue to strike

Workers in the UK saw their pay lag behind inflation at record levels over the past quarter, new figures show.

New figures from the Office for National Statistics (ONS) have revealed that UK wages are lagging behind the cost of living at record levels.

The ONS said regular pay, excluding bonuses, grew by 4.7% over the last the three months to June.

It comes after Consumer Prices Index inflation (CPI) reached 10.1% last month, up from 9.4% in June and expected to rise even further, peaking at around 11% later this year.

The ONS said this resulted in a 4.1% drop in regular pay for employees once CPI inflation is taken into account, representing the biggest slump since records began in 2001.

UK workers saw their pay lag behind inflation at record levels over the past quarter (Photo: PA)

ONS director of economic statistics Darren Morgan said: “The real value of pay continues to fall. Excluding bonuses, it is still dropping faster than at any time since comparable records began.”

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Cost of living crisis

The mismatched ratio of wages versus inflation means that a worker earning £11 an hour right now will be much worse off than a worker earning £11 an hour in 2021.

With fuel and electricity costs continuing to rise rapidly, the gap between pay rises and inflation is causing the real value of money to continue to fall.

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Pay rises for public sector workers are largely under the rate of inflation, including the pay of NHS nurses, who are being urged by Royal College of Nursing (RCN) to ballot for strike action.

The impact in Liverpool and Merseyside

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The picket line outside Liverpool Lime Street station (Photo: PA)

Workers across the UK are feeling the effects of the cost of living crisis and the decreased value of their income, leading to an increase in strike action.

In Liverpool, Arriva North West bus workers have been on strike for almost four weeks, fighting for a ‘fair pay rise’.

Represented by Unite the Union and GMB, members voted on Tuesday to reject a 9.6% pay increase offer from the company and remain on the picket line.

Members of the National Union of Rail, Maritime and Transport Workers (RMT) are continuing to strike over pay and safety, action which will be affecting Merseyrail services on August 18 and August 20.

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Meanwhile, Liverpool dockers voted for strike action on Monday after a pay offer of 7% - much lower than the rate of inflation - Mersey Docks and Harbour Company (MDHC). In a ballot of Unite members, 99% backed a proposal to walk out, with a turnout of 88%.

Demonstrators gather outside the entrance to the Port of Liverpool in March, 2022. Photo: Anthony Devlin/Getty Images

Unite’s general secretary Sharon Graham said: “Our members at MDHC have Unite’s complete backing and support in these strikes for a fair pay rise.”

Commenting on the record fall in wages for UK workers, she said: “It demonstrates the vital need for unions like Unite to defend the value of workers’ pay.

“It also underlines the fact that - as we have said many times - wages are not driving inflation. We will continue to do whatever is necessary to defend jobs, pay and conditions during this cost-of-living crisis.”

More “real” living wage employers in Liverpool

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Amid the cost of living crisis a study has revealed the number of Liverpool employers who have signed up to the voluntary living wage scheme over the past year.

The Living Wage Foundation encourages employers to sign up to pay a “real” living wage, which is higher than the minimum wage and pegged to living costs.

The rate, which is calculated by a group of economists and applies to employees aged 18 and over, currently stands at £9.90 per hour across the UK and £11.05 in London, to reflect higher prices in the capital.

For comparison, the Government’s living wage stands at £9.50 per hour for people aged 23 and over, and £9.18 for over 21s.

Figures show there were 98 accredited real living wage employers in Liverpool as of the start of July – up from 70 at the same point last year and 18 five years ago.

Katherine Chapman, director of the Living Wage Foundation, said the cost-of-living crisis has made increasing wages for the low-paid “more important than ever”.

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She said paying the living wage is not only “the right thing to do for struggling workers and families, but it’s also good for businesses, with employers benefitting from greater staff morale and productivity, and reduced staff absenteeism and turnover”.

Across the North West, there are 985 real living wage employers, an increase from 273 in 2017. Despite this, many UK workers are still on low pay.