UK wages drop among worst in Europe

[ttosca]

Wages in the UK have suffered one of the sharpest falls in the EU, lower than some eurozone crisis hit countries, House of Commons library figures have revealed.

A 5.5 per cent reduction in average hourly wages since 2010, adjusted for inflation, means British workers have felt the squeeze more than workers in countries harder hit by the eurozone crisis like Spain, which saw a drop of just 3.3 per cent.

cont'd...

www.channel4.com/news/uk-wages-fall-eu-eurozone-crisis-cameron-labour

I'm not surprised in a way - not surprised wages have fallen so much in the UK. But am surprised we are worse off than Spain and other countries which are apparently in a much more extreme situation than ours.

We are not worse off than Spain. The drop has been more than Spain's but from a higher point to start with.

Playing Devil's advocate, couldn't it be argued that the bigger drop in wages correlates with a smaller drop in unemployment?

Or conversely, Spain's unemployment is so high precisely because their wages have remained so buoyant. The fact that Spain is in a currency union means that inflation, which I assume is responsible for the lions share of our reduction of income, is less of a factor for them.

Secondly, as we were paying ourselves more than we were making (as a country) which is the problem in many countries and is why we have had to borrow so heavily, perhaps, it would be more accurate to say that we, along with the Dutch, Greeks and Portugese, are doing the most to address one aspect of our economic problems, so are among the best in Europe. Ie, we expect to have a healthy economy sooner.

lol! What?

Playing Devil's advocate, couldn't it be argued that the bigger drop in wages correlates with a smaller drop in unemployment?

Partially, yes, though employment figures are misleading because people who are forced in to workfare schemes are also classified as 'employed' and secondly because a lot of the jobs are people being employed as temps or other short-term, insecure work.

scriptonitedaily.wordpress.com/2013/08/06/1-million-jobless-left-out-of-uk-govt-unemployment-figures/

These sorts of jobs will not help the economy recover.

Or conversely, Spain's unemployment is so high precisely because their wages have remained so buoyant.

No. Spain's wages have never been that high, and there are many reasons why unemployed can be high apart from high wages, or wage inflexibility.

Isn't this economics 101???

With inflation running at higher levels than expected, the Uk imports all its raw products, services and utilities having to pay going rates, wages are not going to buy the same basket.

Our market is also one of the most international and the FTSE is really far removed to the actual UK market.

Here is another example of the way the employment figures are misleading - the huge rise in 'zero hour' contracts, which means that there are people who may actually work only a few hours per month are classified as 'employed':

Zero hours, zero benefits, zero enthusiasm. Why would anyone take a job on these terms?

mikesivier.wordpress.com/2013/08/05/zero-hours-zero-benefits-zero-enthusiasm-why-would-anyone-take-a-job-on-these-terms/

The rise in zero hours contracts have been able to gain traction because of the economic climate where people are more willing to work on one of these contracts just to get a job. I honestly think as the economy improves, employers will start to struggle to fill these contracts since they are skewed totally in favour of them.

That said, it's not always bad. My wife started her job on a zero hours contract. Her employer used this as a way really to weed out the idiots. Ie. If you don't perform, you don't get shifts. If you are reliable & consistent then you pretty much got as many shifts as you wanted. She was on a zero hour contract for about a year before moving on within the company to a supervisory position so it can work out.

I do accept though that some companies take the piss but not all do.