UK Families Hit Hard by Sky-High Inflation, Real Wages Fall, and Cost-of-Living Crisis Deepens
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UK Families Hit Hard by Sky-High Inflation, Real Wages Fall, and Cost-of-Living Crisis Deepens

…By Larry John for TDPel Media.

Official figures released on Tuesday revealed that the sky-high inflation in the UK has significantly reduced the spending power of millions of families, intensifying the cost-of-living crisis at the beginning of this year.

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In real terms, regular pay, which excludes bonuses and considers inflation, dropped by two percent during the January to March period compared to the previous year.

If bonuses are included, the decline steepens to three percent, according to data from the Office for National Statistics (ONS).

This decline in wages has contributed to the financial strain experienced by families.

Wage Growth Fails to Keep Up with Inflation

Despite the growth in average total pay, which includes bonuses but not inflation, reaching 5.8 percent, and the growth in regular pay (excluding bonuses) being 6.7 percent among employees from January to March 2023, these increases have not kept pace with inflation.

Consequently, the real value of wages has fallen.

The data from the ONS highlights the widening gap between wage growth and inflation, resulting in reduced purchasing power for families across Britain.

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The two-percent drop in real terms regular pay, and the steeper three-percent decrease when considering bonuses, demonstrates that the rising prices are outstripping the average earnings of individuals.

This disparity exacerbates the cost-of-living crisis and puts immense financial pressure on families.

Impact on Low-Paid and Insecure Workers

Jonathan Ashworth, the Shadow Work and Pensions Secretary, expressed concern over the situation, emphasizing that falling real wages are squeezing family finances to the breaking point.

Ashworth also highlighted the decrease in employment levels since the pandemic and the record-high number of people out of work due to long-term sickness.

Ben Harrison, Director of the Work Foundation at Lancaster University, noted that the decline in regular pay for the 16th consecutive month, combined with double-digit inflation, poses significant challenges for the six million low-paid and insecure workers in the UK.

These individuals are disproportionately affected by the rising cost of living.

Sectoral Differences and Labour Disputes

The average regular pay growth in the private sector was seven percent, while in the public sector, it stood at 5.6 percent during January to March 2023.

Despite these sectoral variations, the overall growth in wages has failed to offset the impact of inflation.

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Additionally, there has been an increase in labor disputes, with 556,000 working days lost in March 2023, compared to 332,000 in February 2023.

Unemployment and Employment Trends

According to the Office for National Statistics, the UK unemployment rate rose to 3.9 percent in the three months leading up to March, compared to 3.8 percent in the previous quarter.

The rise in unemployment was mainly driven by an increase in the number of men without jobs.

However, the number of individuals neither working nor seeking employment continues to decline, except for those on long-term sick leave, which reached a new record high.

The number of people on employers’ payrolls fell in April 2023 for the first time in over two years, although this preliminary estimate may be subject to revision.

Analysis:

The rise in unemployment and the decrease in the number of individuals on employers’ payrolls suggest ongoing challenges in the labor market.

While employment and unemployment rates have both increased, there is a persistent gender disparity, with men being more affected.

Moreover, the number of individuals not working due to long-term sickness has reached a record high, further straining the labor market.

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About the Author:

Larry John is a talented writer and journalist based in New York, USA. He is a valued contributor to TDPel Media, where he creates engaging and informative content for readers. Larry has a keen interest in current events, business, and technology, and he enjoys exploring these topics in-depth to provide readers with a comprehensive understanding of the issues. His writing style is characterized by its clarity, precision, and attention to detail, which make his articles a pleasure to read. Larry’s passion for storytelling has earned him a reputation as a skilled writer and a respected authority in his field.

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