Wages have fallen by more in real terms during the current economic downturn than ever previously recorded, according to new research which found an “unprecedented” impact even on workers who have kept their jobs.
One-third of workers who stayed in the same post following the recession suffered a cut or freeze in their wages in cash terms in 2010-11, according to analysis by economic think-tank the Institute for Fiscal Studies (IFS).
Once inflation is taken into account, real-terms pay has fallen by more since the recession began in 2008 than in any comparable five-year period, said the IFS.
They found that many UK companies have cut wages rather than lay off staff. Workers have been willing to accept pay reductions because of the fierce competition for jobs.
