The value of UK workers’ wages has suffered one of the sharpest falls in the European Union, House of Commons library figures have shown.
Average hourly wages have slumped by 5.5 per cent since mid-2010, including adjustment for inflation – the fourth worst drop in the 27-country bloc.
The fall means that British workers have felt the squeeze more than those in countries which have been rocked by the eurozone crisis, including Spain, which saw a 3.3 per cent drop over the same period and Cyprus, where salaries fell by 3 per cent in real terms.
Real wages have fallen for 35 consecutive months – leaving Prime Minister David Cameron with a record worse than any previous British leader, while spending power has dropped in every month but one under coalition rule as price rises outstrip wage increases.
Only the Greeks, Portuguese and Dutch have had a steeper decline, the analysis showed – while in Germany, hourly wages rose by 2.7 per cent over the same period and in France there was a 0.4 per cent increase.
“These figures show the full scale of David Cameron’s cost of living crisis,” said shadow Treasury minister Cathy Jamieson.
“Working people are not only worse off under the Tories, we’re also doing much worse than almost all other EU countries.
“Despite out-of-touch claims by ministers, life is getting harder for ordinary families as prices continue rising faster than wages.
“People on middle and low incomes have also seen tax rises and cuts to tax credits, while millionaires have been given a huge tax cut.”
She added: “Ministers keep talking about the global race, but when it comes to living standards, it’s clear we’re losing.”
The Labour Party has sought to highlight the rising cost of living in its attacks on the government’s economic policies.
Workers will have lost £6,660 by the time of the next election and incomes will be £1,520 lower in real terms in 2015 than in 2010, according to Labour analysis of Office for Budget Responsibility forecasts.
James Callaghan is the only prime minister on record to have overseen more than a year of constantly falling real wages, the party’s analysis of Office for National Statistics figures showed.
The government claims it has helped households deal with the higher cost of living through its hike of the tax free personal allowance to £10,000 and other measures, including a freeze on fuel duty.
“The economy is on the mend, but we’ve still got a long way to go as we move from rescue to recovery and we appreciate that times are still tough for families,” a Treasury spokesman said.
The GMB union warned that the government was “directly responsible” for the fall in wages.
“Employers paying low wages get taxpayer subsidies in the form of tax credits to assemble a workforce for them to make decent profit margins,” it said.
The average wage drop across the eurozone was 0.1 per cent.
Jobs rise boosted by increase in temporary staff to 1.6 million
Almost half of the rise in employment in the past few years has been in temporary work, a study has revealed.
Research by the TUC showed that the number of temporary workers increased by 89,000 in the two years to the end of December 2012, to reach 1.6 million.
The UK’s temporary workforce has jumped by 230,000 since 2005, while permanent jobs have fallen by 8,000, the organisation said.
The number of people in temporary jobs who were unable to find permanent work has been increasing “sharply” for years, the report found, more than doubling to 655,000 in 2012 compared with 2005.
The TUC said the figures dispel the argument that staff are happy with temporary or fixed-term work because of the flexibility it offers, saying the UK workforce is increasingly “insecure” and “vulnerable”.
“Millions of people have taken shorter hours, temp jobs and zero hours contracts in order to stay afloat during the recession and stagnation,” said TUC general secretary Frances O’Grady.