Socialist Worker

Real wages fall and inequality rises as the bosses cut corners

Issue No. 2555

Attacks on pay have provoked strikes in several industries

Attacks on pay have provoked strikes in several industries (Pic: Socialist Worker)


It’s official—prices are now rising faster than wages, which means real wages are falling.

Average regular weekly pay in the three months to March was 0.2 percent lower than a year ago after taking account of the rate of inflation.

Inflation subsequently accelerated in April, which suggests the squeeze on pay is likely to intensify in the coming months.

The latest official forecasts suggest the average worker in Britain will earn less in 2021 than they did in 2008.

Inequality is also expected to increase in the next few years because the benefits that top up the incomes of low-paid workers have been frozen in cash terms.

Schemes

Meanwhile, companies in Britain are holding down wages to shore up pension schemes rather than take the money from shareholders, executives or profits, new research has shown.

Many private sector pension schemes have deficits because companies took “pension holidays” where they either paid in nothing or failed to pay in enough.

The Resolution Foundation reported this week that during the last 16 years an average 10 percent of the money paid into schemes that offer a guaranteed payout came from suppressing wages.

Research earlier this year showed that nearly half of Britain’s top 100 companies could have cleared their entire pension deficits with the payment of just one year’s dividends that are paid to their shareholders.

The companies in the FTSE 100 index handed out £69 billion to shareholders, more than five times the £13 billion they made in pension contributions.


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