TUC Finds UK Wages Aren’t Keeping Up with Other Countries

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Photo Credits - Towfiqu Barbhuiya via Unsplash

According to a recent analysis conducted by the Trades Union Congress (TUC), workers in the UK are set to miss out on an average of £3,600 in pay this year due to their wages failing to keep up with the OECD average. The TUC has labelled the UK’s wage growth since the financial crisis as “abysmal,” resulting in 15 years of pay stagnation, with average real pay still 2.7% lower compared to 2008. In stark contrast, the OECD as a whole has experienced an average real wage growth of 8.8% during the same period, leaving UK workers significantly worse off compared to their counterparts in other countries.

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Findings of the TUC Analysis

Unfortunately, the TUC analysis suggests that the pay gap between the UK and the OECD is set to worsen in the coming year. Based on current OECD forecasts, workers are projected to miss out on an additional £3,800 next year as UK wage growth continues to lag. This situation has positioned the UK as an international outlier, with wage growth in most other OECD countries having returned to pre-crisis levels by 2015, while real wages in the UK remain below 2008 levels.

The TUC analysis places the UK in the “relegation zone” of wage growth among OECD countries, ranking 27th out of 33. This underperformance is compounded by a double blow of high inflation and historically poor wage growth, making UK workers particularly vulnerable. The UK currently suffers from the highest inflation rate among the G7 countries and the longest period of pay stagnation in over two centuries. Years of pay cuts have left workers across the country exposed to the rising cost of living, exacerbating the financial strain on households.

Amid this concerning situation, the TUC has called on ministers to stop scapegoating workers for rising inflation. While real wages are declining across the board, recent TUC analysis reveals that nominal pay growth is accelerating only for the top 10% of earners, while it is slowing for the rest of the workforce. Workers among the top 1% of earners, with an annual income of at least £180,000, have witnessed their pay growth more than double since the beginning of the year. Conversely, workers with a median salary of £26,600 per year have experienced a steep decline in annual wage increases, with figures halving since the start of the year.

Instead of blaming workers, the TUC emphasises the need for ministers to prioritise a credible plan for sustainable growth and rising living standards. The union body urges the government to address the underlying issues causing poor wage growth and implement policies that will support workers across the income spectrum. It is crucial to tackle the growing pay gap and ensure that all workers in the UK can benefit from fair and adequate compensation that keeps pace with the rising cost of living.

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The UK Compared to Other OECD Countries

Among the countries in the OECD, the UK has shown to be significantly behind. Below shown are the numbers from the top 5 countries, the OECD average and the UK. 

CountryReal Pay Growth 2008 to 2023 in %Rank
Lithuania35.51
Poland35.52
Latvia31.93
Estonia29.74
Israel27.35
OECD Average8.8
United Kingdom-2.727

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