Real wages in the United Kingdom
The public sector has lost out since the pandemic, but so too have others
Industrial action is increasingly common across the UK as public sector real wages have been pushed down roughly 5% since end-2019, back to levels seen in late-2003;
Against this, private sector real wages are roughly flat since the pandemic; but this masks gains in certain sectors—financial and business services have gained about 4%, while other private sector workers are considerably worse off;
In other words, despite recent nominal wage gains, there is some distance to run before pre-pandemic real wages are restored.
The pandemic and then energy shock have been exceptional. So we take a slightly different tone here as we review the facts about real wages in the United Kingdom since the pandemic.
Indeed, anyone going about their daily business in the UK this winter will have noticed the sporadic impairment of public sector services due to industrial action. Strikes are ongoing, or will soon happen, amongst nurses, ambulance workers, border force staff, bus drivers, university staff, postal workers and civil servants.
How bad is the public sector real wage situation?
Real wages in the UK
If we set the ONS average weekly pay data (total compensation, i.e., including bonuses) for public and private sector workers to unity in Jan. 2000, deflating by the seasonally adjusted consumer price index, we can track real wages since the millennium through Oct. 2022. (The Nov. data being out only next week.)
Whereas real public sector compensation roughly followed private peers since 2000, it decreased sharply during the pandemic.
Average weekly public sector compensation in Oct. 2022 was the same as in Jan. 2004, representing for those on the receiving end 18 years of stalled progress.