This site is intended for health professionals only

Job fears take toll on staff salaries

28 March 2011

Share this article

Workers are more than £1,000 worse off than they were two years ago as their pay has failed to keep pace with hikes in the cost of living, research indicates.

The average employee has seen the value of their take-home pay dive by £1,088, or 5%, since the middle of the recession, according to BBC One’s Panorama programme.

The study found that average annual salaries were £20,419 once tax had been deducted, but once the impact of inflation was factored in, the buying power of people’s pay was actually lower now than in 2004.

The programme found that the squeeze in people’s living standards has been made worse by workers being too afraid of losing their job to ask for a pay rise.

David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee, told Panorama: “One of the bleak things going on right now is that people are very fearful of losing their jobs.

“They’re worried about the austerity that’s coming, and that’s especially true of people in the public sector.

“So unemployment and the fear that it’ll rise further, is what’s containing wage pressure right now. And company profits have been also relatively low, so the ability of firms to pay has actually prevented wages from rising.”

Copyright © Press Association 2011