WORK-LIFE BALANCE / JAN. 22, 2014
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UK Public Sector Employees Face the Biggest Drop in Living Standards

The New Economic s Foundation (NEF) think tank pointed out that more than five million  people are officially classified as low paid and an increasing number of public sector  workers are struggling to make ends meet. This situation marks the biggest drop in living standards since the Victorian age. Women and part-time workers today are disproportionately affected.

The squeeze on real wages for UK workers has been toughest for those in public sector jobs, new figures suggest. The average public sector is left £3,700 worse off as austerity measures continue to bite.  High inflation as well as trivial pay rises have blown a big hole in the finances of many households, but the public sector has been hit especially hard because of pay freezes imposed on many government workers. 

Public sector wage rises and staffing levels have been restrained by the coalition Government which came to power in May 2010. The measures involved a two-year pay freeze for anyone earning a salary of £21,000 or more which was followed by a two-year cap on pay rises at an average of 1% a year.

More Than Five Million People are Classified as Low Paid

The NEF warned that “workers on low and middle incomes are experiencing the biggest decline in their living standards since reliable records began in the mid-19th century”. The institution has also estimated that public sector now employs one million low-wage workers – double the previous estimate – with health and social care staff, classroom assistants and council employees trapped on small earnings

Paltry Pay Rises

Research from VocaLink, the company processing salary payments for much of the British workforce, shows public-sector salaries grew just 0.5% in the year to last December, which is just a fraction of the 2.2% rise recorded for employees of Britain’s biggest 350 companies. Considering the inflation rate which run at about 2% in December, most workers are hardly any better off than a year ago.

Figures from the Office for National Statistics, which cover a wider cross section of workers, had wage growth at just 0.9% at the last count. But public-sector staff have been hit harder, with VocaLink and the Centre for Economics and Business Research estimating they were 1.4% worse off in the final three months of 2013 once inflation was taken into account. That was a slightly softer pace of decline than the 1.8% drop in the three months to November.

In the past four years, below-inflation wage rises mean the average public sector worker has seen outgoings rocket by £3,698 more than their pay.

The Trades Union Congress General Secretary Frances O’Grady stated  that “This is the shocking cost of the living-standards crisis for ­hard-working public-sector workers. Some accepted pay restraint as an alternative to job losses. But nurses, teachers and dinner ladies have had to contend with cuts to pay, jobs and pensions, even while the economy has started to improve”.

All in all, it is clear that higher costs and frozen pay have severely taken public sector workers’ toll at a time when MPs are provocatively set to receive an 11% pay rise in 2015. Welfare reforms must immediately occur to further boost work incentives and improve the living standards of some of the most underprivileged British workers.

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