National: Workers face wait of years before pay returns to normal
WORKERSÂ will have to wait several years - and over a decade in London - until real average pay returns to pre-crisis levels, a new study suggests.
The strength of the economic recovery depends on where people work and what jobs they have, said the Resolution Foundation.
Real average pay is on course to return to pre-crisis levels by the end of 2024, but could take far longer in areas including London, said the think tank.
Its report, published ahead of the latest official figures on wage growth, indicated that earnings will not return to their peak in London until 2030 and until 2028 in the East Midlands.
Scotland is closest to returning to pre-crisis levels, although not until 2020, said the report.
Stephen Clarke of the Resolution Foundation, said: '˜Britain is just two-thirds of the way through an unprecedented pay downturn. The level of pay workers enjoyed before the crisis is not expected to return until the middle of the next decade.
'˜For Londoners the end could still be over a decade away. Scotland in contrast looks likely to return to peak pay first.
'˜But while the long-run picture on pay is pretty gloomy, there are now signs that Britain's long overdue pay recovery is finally gaining momentum. Nominal pay growth has hit 3% for the first time since the crisis, and could strengthen further in the coming months.
'˜Sectors like hospitality, finance and real estate are already experiencing pay rises well above 4% as the pool of available labour to draw upon continues to shrink.
'˜Ultimately though, our long-term pay prospects depend on higher productivity growth. Until that happens, we're unlikely to see a strong and sustained wage recovery.'
A separate report, by jobs site Adzuna, found that advertised salaries have fallen '˜consistently'Â since April, while the number of vacancies is down by 3% over the past year.
Teaching bucks the trend, with a double-digit wage growth and more jobs advertised in recent months than for two years, said Adzuna.
Andrew Hunter, co-founder of Adzuna, said: '˜It's worrying to see salaries declining once again, just as real wages were looking like recovering back towards where they were in 2012.
'˜Given the competition for jobs is at an all-time low, we'd expect salaries to rise as companies compete for the remaining top talent.'
A Government spokesman said: '˜Regular real wages are rising and have done so for six consecutive months, putting more money into hard-working people's pockets.
'˜Workers also benefit from the Government's decision to cut taxes for 32 million people.
'˜The only way to sustainably increase wages and improve living standards is by upping the UK's productivity, which is why we are investing Â£38 billion in infrastructure, transport, and skills.'