Wages fail to keep up with ‘spiralling cost of living’

As employees are faced with more and more challenges regards being able to afford bills and live comfortably, the latest data from the Office for National Statistics (ONS) has revealed more bleak news.

It discovered that growth in average total pay (including bonuses) was 5.4%, which has failed to keep pace with the 6.2% rise in the consumer prices index (CPI) in February.  

For those who did not pocket a bonus, things were worse as average wages rose by just four percent.

These figures have prompted union body Trades Union Congress (TUC) to call on the chancellor to introduce extra support for families.

Frances O’Grady, general secretary at the TUC, explained: “Everyone should have the security to be able to pay their bills. But household incomes are being obliterated as wages fail to keep pace with the spiralling cost of living.

“We can’t go on like this. The chancellor must come back to parliament with an emergency budget to help people through this crisis.”

She advised Rishi Sunak to boost the national minimum wage, universal credit and pensions, and asked that he bring down energy bills by using a windfall tax to fund grants, not loans.

“At a time when many key workers feel exhausted and burnt out – and when staff shortages are really hitting our public services – this is the last thing the country needs,” she added.

In a thread shared by the ONS on Twitter, it revealed that after taking inflation into account, average pay including bonuses rose 0.4% in the year to December 2021 to February 2022, while excluding bonuses it fell 1.0%.

Commenting on this, Darren Morgan, director of economic statistics at the ONS, said: “While strong bonuses continue to mitigate the effects of rising prices on people’s total earnings, basic pay is now falling noticeably in real terms.”

Despite this, the number of employees on payroll continued to grow in March 2022 and is now 544,000 above its pre-pandemic level.

Headline indicators for the UK labour market for December 2021 to February 2022 show that

▪️ employment was 75.5%
▪️ unemployment was 3.8%
▪️ economic inactivity was 21.4%

➡️t.co/QCJV39NTrS pic.twitter.com/pOxpviFeKq

— Office for National Statistics (ONS) (@ONS)

Headline indicators for the UK labour market for December 2021 to February 2022 show that

▪️ employment was 75.5%
▪️ unemployment was 3.8%
▪️ economic inactivity was 21.4%

➡️https://t.co/QCJV39NTrS pic.twitter.com/pOxpviFeKq

— Office for National Statistics (ONS) (@ONS) April 12, 2022

Headline indicators shared by the ONS revealed that from December 2021 and February 2022 employment was at 75.5%, unemployment was at 3.8%, and economic activity was at 21.4%.

Total actual weekly hours worked for the same period reached 1.04bn, 18.8m up on the previous three months.

Despite this, the ONS pointed out that this is still 14.6m below pre-Covid pandemic levels.

Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC), commented: “The labour market is tighter than it has ever been right now. Unemployment is low, but employment levels are still significantly lower than before the pandemic.

“We also have rising numbers of people who aren’t working but also aren’t looking for a job. Finding ways to tempt some of them back into work will be very important in the coming months.”

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