UK 'unprecedented' wage fall

Wages have fallen by more in real terms during the current economic downturn than ever previously recorded. Research shows one-third of workers who stayed in the same post following the recession suffered a cut or freeze in their wages in 2010-11.

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Workers face wage pressures to keep companies afloat

There were more positive signs for the economy today as official figures showed that unemployment dropped by a further 5,000 between February and April.

But other research showed that those people in work are having their living standards eroded as many face wage cuts or freezes.

ITV News' Economics Editor Richard Edgar reports from a brewery in Somerset:

Cameron defends Government's employment record

David Cameron defended the Government's "good record" on jobs today amid Labour claims that he is ignoring the cost-of-living crisis facing workers.

During angry exchanges during Prime Minister's Questions in the Commons, Ed Miliband said real wages had fallen by an average of more than £1,300 because of salary freezes and the soaring cost of living.

The Prime Minister suggested the Government's employment record merited "respect" Credit: PA

Mr Cameron said: "They want to talk down our economy. To pick a day like today - more people in work, unemployment down, youth unemployment down, the claimant count down - not one word of respect for that good agenda on jobs."

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How the 'unprecedented' fall in wages is affecting you

As new research showed that UK wages have fallen more than ever, we asked readers of the ITV News Facebook page how they had been affected.

Many concurred that their wages had fallen in real terms, with Heidi Bashford saying: "Mine have been frozen for five years... shame that food prices aren't frozen."

Many UK workers are feeling the pinch amid a raft of pay freezes Credit: Rui Vieira/PA Wire

Mary Challoner said: "Mine have been frozen since 2011, a pay rise would be lovely but I know it ain't happening."

Shirley Barbeary added: "My wages were frozen for two years, then redundancy last June."

And even some pay rises were not as lucrative as they seemed, explained Christina Price Pakes: "My husband has just had a so-called pay rise, but they got rid of the weekly bonus so actually (he) had a pay cut of £20 a week."

Unemployment falls by 5,000 to 2.51 million

UK unemployment fell by 5,000 between February and April to 2.51 million, according to official figures today.

The number of people claiming jobseeker's allowance last month fell by 8,600 to 1.51 million, said the Office for National Statistics.

Average earnings increased by 1.3 percent in the year to April, 0.7 percent up on the previous month.

Treasury: Labour market has remained strong

As the IFS says, the UK is recovering from the 'longest and deepest' recession in a century.

Despite this, the labour market has remained strong: one-and-a-quarter-million private sector jobs have been created and more people are in private sector employment than ever before.

The Government understands the pressures that households face with the cost of living and has taken action to help including increasing the personal allowance, taking 2.7 million people out of income tax altogether and saving a typical taxpayer over £700, and freezing fuel duty for nearly three-and-a-half years.

– Treasury spokesman

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'Unprecedented' fall in worker wages during recession

The falls in nominal wages that workers have experienced during this recession are unprecedented, and seem to provide at least a partial explanation for why unemployment has risen less, and productivity has fallen more, than might otherwise have been expected.

To the extent that it is better for individuals to stay in work, albeit with lower wages, than to become unemployed, the long-term consequences of this recession in terms of labour market performance may be less severe than following the high unemployment recessions of the 1980s and 1990s.

– Fiscal Studies managing editor Claire Crawford

Third of workers wages cut or frozen in 2010-11

Wages have fallen by more in real terms during the current economic downturn than ever previously recorded, according to an economic think-tank.

According to the Institute for Fiscal Studies, a 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.

The research found an "unprecedented" fall in workers' wages Credit: Press Association.

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 think-tank in a working paper for the magazine Fiscal Studies.

It found that many UK companies, particularly smaller businesses, have cut wages rather than lay off staff.

Workers have been willing to accept pay reductions because of the fierce competition for those jobs which are available.

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