Finally! Pay creeps higher than it was in pre-financial crash 2008

Finally! Pay creeps higher than it was in pre-financial crash 2008 with the rise in the average wage ending a 12-year squeeze on workers

  • ONS said pay packets adjusted for inflation worth more than before 2008 crash
  • Revealed a surge in female workforce has pushed number in jobs to record high
  • However fact it has taken well over decade highlights devastating toll of crisis

Average wages have finally edged above pre-financial crisis levels – ending a 12-year squeeze on workers.

In a symbolic moment, the Office for National Statistics said pay packets adjusted for inflation are worth more than they were before the 2008 crash.

Following an annual rise of 1.8 per cent, average weekly earnings excluding bonuses hit £474 – £1 above the pre-downturn peak of £473 recorded in March 2008.

The ONS revealed that a surge in the female workforce has pushed the number of people in jobs to a record high as economists hailed the recovery in wages. 

The Office for National Statistics has said pay packets adjusted for inflation are worth more than they were before the 2008 crash (stock picture)

Sarah Coles, a personal finance analyst at Hargreaves Lansdown, said: ‘We lost a dozen years of wage growth to the financial crisis, but we’re finally emerging from the other side – pay is now higher than it was back in March 2008.’

The fact that it has taken well over a decade to reach this moment highlights the devastating toll of the financial crisis on households.

2,000 people A DAY get a job 

Almost 2,000 people a day found work in the final three months of last year, the Office for National Statistics said.

The ONS employment report delivered a series of records. The number in work surged by 180,000 – or 1,956 a day – between October and December to hit a new high of 32.93million.

The employment rate, which nudged up from 76.3 per cent, was the highest since records began half a century ago.

Record numbers of women in work – 15.61million – has driven the boom while the number in full-time employment also hit an all-time high of 24.42million. Meanwhile the jobless rate of 3.8 per cent is at a 45-year low with 1.29million people unemployed – 73,000 fewer than a year ago.

Experts said the surge was all the more impressive as it came as the economy flat-lined in the final three months of last year.

Separate figures released last week by the ONS revealed the economy – as measured by gross domestic product –did not grow at all between October and November.

Millions of workers who managed to hang on to their jobs endured a pay freeze, or meagre pay rises in the years after the financial crisis. In many cases any rises were wiped out by inflation, meaning households across the country were seeing the spending power of their pay packets fall.

Nye Cominetti, senior economist at the Resolution Foundation think-tank, said: ‘The return to record pay at the end of 2019 marks an important – and welcome – milestone.

‘However, the fact that it has taken 12 years to get to this point shows what a living standards disaster our pay packets have been.

‘Workers are, on average, nearly £150 a week worse off than if the pre-crisis pay growth had continued.’ 

The milestone was reached despite a slowdown in wage growth, with average earnings not adjusted for inflation up 3.2 per cent in the year to December, down from 3.4 per cent in November.

Average total pay packets including bonuses are still 3.7 per cent short of pre-financial crisis levels.

Myrto Miltiadou, deputy head of labour market statistics at the ONS, said: ‘In real terms, regular earnings have finally risen above the level seen in early 2008, but pay including bonuses is still below its pre-downturn peak.’ 

Yesterday ministers pointed out that wages are growing significantly faster than inflation, which is boosting the spending power of millions of homes.

Employment minister Mims Davies said: ‘With wages still outpacing inflation, UK workers can expect their money to go further as we look ahead to a decade of renewal.

‘The upcoming Budget will steer us on that course, further driving our levelling up agenda – so we can all share in the country’s prosperity.’ 

The fact that it has taken more than a decade for pay to creep back up highlights the toll of the financial crisis on households (stock picture)

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