As average earnings in the UK drop back to levels not seen for a decade, official statistics show that men have suffered the biggest decline with a 4 per cent slide in wages since 2003.
Last year, the median gross hourly wage in the UK was £11.21 – 3 pence less than in 2003, figures adjusted for inflation show.
After three decades of strong wage growth, real wages (wages that have been adjusted for inflation) peaked in 2009.
Yet since the 2008-09 recession, inflation has outstripped wage growth and pushed average earnings in real terms down to “similar levels to those of 2002-03”, said the Office for National Statistics (ONS).
“This represents an annual wage drop in real pay of nearly 3 per cent in 2010-12,” the ONS said. The median gross hourly wage back in 2003 was £11.24 (in 2012 money), the ONS told Channel 4 News.
As a result, the median gross wage in 2012 came in around a £1 less an hour than in 2009, when the median gross wage peaked at £12.25 an hour.
Men in full-time positions in the private sector have been the worst hit, said the ONS, both in London and the UK as a whole. In 2012, male full-time employees living in London earned £15.54 an hour – 4 per cent less than in 2002 when they were on the equivalent of £16.14.
What's changed in a decade?
Average house price
2003 £179,922, 2012 £162,924
Petrol per litre
2003 94p, 2012 £1.25
Loaf of white bread
2003 77p, 2013 £1.31
Tea bags (250g)
2003 £1.94, 2013 £2.05
Pint of milk
2003 49p, 2013 46p
Sources: Nationwide, House of Commons Library, ONS. 2003 prices adjusted for inflation.
The self-employed also suffered a sharp decline in real income in the wake of the recession, particularly in London where the median real income from self-employment fell by a third between 2007/08 and 2010/11.
Though the ONS said it was “too early” to be sure if there has been a permanent change in the long-term trend, the slide has now been sustained for three consecutive years.
Signalling there may be no relief on the immediate horizon, the Bank of England warned today that inflation will rise to 3 per cent or more and remain above target for a further two years.
The ONS said though there were regional variations, the decline in London salaries were “a little less steep” than for the country as a whole.
London employees’ earnings averaged £15.70 an hour in 2012, down from a peak in 2009 of £17.07 (in 2012 money).