Stagnation has cost UK workers £11,000 a year

Fifteen years of economic stagnation have cheated British workers out of £11,000 a year according to the Resolution Foundation.

The think tank says that, if wages had continued to grow as they were before the financial crash of 2008, real average weekly earnings would be around £11,000 per year higher than they are now, equal to “a 37% lost wages gap”.

And the gap between typical UK household incomes and those of comparable countries has also widened. Pre-crash, German households were better off than British households by £500 per year, but that has now increased to £4,000.

And it gets worse depending on income. The foundation says that the combination of low growth and high inequality mean that poorer households in Britain are most exposed to this stagnation, so that, while typical UK households are 9% poorer than their French equivalents, low-income households are 22% poorer.

Torsten Bell, the think tank’s chief executive, commented: “The wage stagnation of the past decade and a half is almost completely unprecedented. Nobody who’s alive and working in the British economy today has ever seen anything like this, and the toxic combination of low growth and high inequality has left poorer households particularly exposed.

“This is definitely not what normal looks like. This is what failure looks like, and we urgently need an economic strategy to turn this state of affairs around.”