Repressed remuneration

By G.S, R.D and L.P

Wages in Britain have failed to rebound

THE financial crisis and recession have hit countries differently. America saw jobs obliterated. Germany fared better. But in Britain, the slump pummeled pay rather than jobs. Real wages are now 9% below their peak. In other recent recessions, wages began to ascend after about nine months of declines; this time they have continued to fall over the past 21 months. However private-sector employment has increased by 1.6m jobs since a trough at the end of 2009 and is now 500,000 higher than before the recession. It is a tribute to Britain's flexible labour market. Yet GDP is lower than the peak in 2008. This not only sits awkwardly with the employment figures, but it suggests workers are less productive. As productivity fell and firms' prospects worsened, wages were largely cut or capped. Though this makes life difficult, it is better to have a job with a modest wage than be out of work altogether. See full article.