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British workers set for harshest pay squeeze in G7, warns TUC

WORKERS in Britain are set for the worst real-wage squeeze in the G7 group of richer nations, unions are warning. 

Inflation-adjusted salaries will shrink by an eye-watering £1,750, or 6.2 per cent, over the next two years, according to a TUC report published today.

The research, based on the union confederation’s analysis of figures from the Organisation for Economic Co-operation and Development, suggests Britons are facing the “longest and harshest pay squeeze in modern history.”

Real terms pay growth, which is “stagnant” at home, will bounce back faster in France, Germany, Italy, the United States, Canada and Japan, the TUC predicted. 

A previous study from the organisation showed that working people lost £20,000 in real earnings between 2008’s financial crash and 2021.

A succession of Tory leaders have used the crisis to impose more than a decade of austerity pay on public-sector workers, many unions and Labour’s left have repeatedly warned. 

The top priority for the next prime minister — due in office by September 5 — will be to get wages rising across the economy, the TUC stressed, after Boris Johnson’s Downing Street promised on “20 separate occasions to create a ‘high-wage economy’.”

General secretary Frances O’Grady said: “Making ends meet shouldn’t be a battle, but UK workers are suffering the worst pay squeeze in the G7 and the longest in modern history.

“Having repeatedly promised a high-wage economy, the Conservatives have consigned Britain to the bottom of the league for pay growth.

“Years of standstill wages have left households brutally exposed to this cost-of-living crisis.

“The number one priority for Tory leadership candidates should be to get pay rising across the economy.

“This is the best way to give people long-term financial security and to stop families lurching from crisis to crisis,” argued Ms O’Grady, who is due to step down at the end of the year.

Today’s research suggests Italy’s economy will be second worst-hit, but real wages there are set to fall by just 0.7 per cent next year, as opposed to the 3 per cent slump expected in Britain.

The TUC reiterated its calls for a “significant rise in the national minimum wage, a strengthening of collective bargaining rights to boost pay and a real-terms pay rise for public-sector workers.”

The move, which would start to “restore earnings lost over the last decade,” should also be accompanied by a rise in universal credit to 80 per cent of the real living wage to help the most vulnerable, the union confederation argued. 

The voluntary hourly rate is currently set at £9.90 nationally and £11.05 in London. 

Paul Nowak, currently the TUC’s deputy general secretary, is due to replace Ms O’Grady in January 2023. 

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