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Poorest households benefit from jobs boost but see real wages plummet – new analysis

2 min read

Employment among Britain's poorest households has increased but real wages have plummeted, according to a new analysis.


A new report from the Resolution Foundation thinktank has found that people from the poorest third of households accounted for more than half of the increase in employment since the 2008 financial crash – but that average wages have fallen.

The report found that of the 2.1 million new jobs created in the past decade, over 1.2 million had been taken up by people in the poorest households.

But according to the thinktank, over 800,000 people are now working on zero-hours contracts, which the Foundation claims has led to “widespread insecurity”.

Meanwhile, real average earnings have tumbled, meaning that the average pay packet is £13 lighter per week than it was in 2008.

Shadow Chancellor John McDonnell slammed the figures, saying they showed the “disastrous impact of nearly a decade of austerity on earning, with workers in the UK losing out under Tory rule.

He added: “The findings are a stark example of how brutal Tory pay restraint and austerity has led to a crisis in living standards for families.

“Labour will be a government for the many, not the few. We will reverse the disastrous Tory austerity agenda and give workers a decent pay increase, while ensuring the richest pay their fair share of tax to fund the public services we all need.”

Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, said: “Britain has experienced a huge living standards slump but its incredible employment record has provided a much-needed bright spark amidst the gloom of the pay squeeze.

He added: “But even better than the scale of Britain’s employment growth is who is getting those jobs. Lower income families have accounted for the majority of Britain’s jobs growth, showing that pushing for full employment can boost living standards.

“But while employment is at a record high, Britain is still some way off full employment and too much work remains low paid and insecure.”

A Government spokesperson said: “We have seen more people in work than ever before and the National Living Wage has helped to deliver the fastest earnings boost for the lowest paid in 20 years.

“Through our Good Work plan we are going further to give millions of workers major new rights and protections, including increased financial security for workers on flexible contracts with a new right to request a more stable contract.”

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