Households are suffering the worst two-year squeeze in real incomes since 1945. Total pay in real terms (adjusted for inflation) fell by 2.5 per cent in 2022’s last three months.
High inflation (10.1 per cent, as announced on 15 February), the rising tax burden on workers, and higher borrowing costs, all cause this fall in our living standards.
It’s no consolation that inflation, as measured by the Consumer Prices Index, was slightly lower than in December (10.5 per cent). Many workers are not getting pay rises anywhere near that, even after taking action.
Poorer
Paul Nowak, general secretary of the TUC, said the figures showed how family budgets had been decimated by more than a decade of pay stagnation. He pointed out that the government is choosing to make millions poorer by holding down public servants’ pay and does not recognise the huge pressure households are under.
The Office for National Statistics also found that in 2022’s final quarter a record number of workers were on zero-hours contracts, over 1.3 million people, up by 8.5 per cent on the third quarter’s figure.
Working longer
Unsurprisingly 17 per cent of adults were working more hours than usual, and 4 per cent were working more than one job, to try to keep up with the rising cost of living.
There were 843,000 strike days in December 2022, the most in any month since November 2011. There were 2.4 million strike days in the second half of 2022, the most since 1989.
As Nowak commented, “It is little surprise that workers are having to take strike action to defend their living standards. They have been pushed to breaking point.”