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HALF of workers suffered a real-terms pay cut last year despite official data suggesting the fastest wage growth in nearly two decades, according to a new report.
The Resolution Foundation think tank says that official figures on average weekly earnings have been “hugely disrupted” by the large number of workers on furlough.
Data showing average weekly earnings growth of 4.5 per cent in late 2020 was “too good to be true,” it said.
Its research found that earnings growth was relatively strong among higher-paid workers, but among the lower paid it was weaker. It found that the median pay rise was 0.6 per cent last autumn, a real-terms reduction of 0.2 per cent, meaning that at least half of all workers experienced a pay cut.
Foundation economist Hannah Slaughter said that pay growth was “deteriorating most among those who have been hit hardest by the pandemic: the young, the low-paid and those working in social sectors like hospitality.”
