The average earnings of UK employees in 2012 were roughly the same as 2003 levels in real terms, according to analysis by the Office for National Statistics (ONS).
The analysis, which is based on the ONS’s Annual survey of hours and earnings, found that real wages peaked in 2009. Since then, inflation has outstripped wage increases in cash terms.
It also found that median gross earnings increased slightly to £11.21 in 2012, up from £10.97 in 2009. However, after adjusting for inflation, the 2009 figure was the equivalent of £12.25 an hour in 2012 prices.
This represented a peak in the real value of pay, with average pay in 2012 prices falling to £11.92 in 2010 and £11.41 in 2011. This represents an annual average drop in real pay of nearly 3% in 2010-12.
The analysis also found:
- When looking at the earnings of employees working in London, real-term pay again peaked in 2009, although the subsequent decline was a little less steep than for the country as a whole.
- London employees’ earnings averaged £15.70 an hour in 2012, down from a peak in 2009 at the equivalent of £17.07 (in 2012 prices).
- For both London and the UK as a whole, the 2012 level of pay for those who work in London was roughly the same in real terms as it was in 2003.
- Full-time male employees in the private sector have seen the greatest decline in real earnings since the recession, both for the UK as a whole and for those working in London. In 2012, their average earnings were worth less in real terms than in 2002.