UNIONS warned of a “wages crisis” as figures published yesterday showed a drop in average weekly earnings.
Labour market data from the Office for National Statistics (ONS) revealed a 0.7 per cent fall in real wages compared to a year earlier.
Households are continuing to feel the pinch as pay falls further behind with the cost of living.
Inflation rocketed to a four-year peak of 2.9 per cent in May, with economists predicting it will hit 3 per cent by the autumn.
Statistics also showed that employment had climbed to its highest in 42 years, with 32 million people in work, a rise of 324,000 since last year.
However, Unite general secretary Len McCluskey said it was no time for “self-congratulatory backslapping” over the employment figures, as he pointed to the “dramatic rise of in-work poverty” with one in three people reporting that they had no job or income security.
And Mr McCluskey warned of the biggest wage squeeze since the Napoleonic wars as he urged the government to stop seeing trade unions as the “enemy within” and to support them as they strive to support working people.
“We need a renewed focus on ending the wage squeeze, with ministers straining every sinew to ensure work pays a decent wage in this country,” he said.
“Lifting the self-defeating cap on the pay of millions of public-sector workers has to be top of the list.”
TUC general secretary Frances O’Grady said: “Three months of falling pay is three months too many. The clock is ticking while workers wait for the government to act.”
To get real wages up, Ms O’Grady said the government must scrap the 1 per cent cap on public-sector pay increases and raise the national minimum wage to £10 per hour.
Shadow work and pensions secretary Debbie Abrahams said: “We welcome the overall increase in employment but are deeply concerned that millions have faced a real-terms pay cut under this government.
“The cost of basic essentials continues to rise as real wages decline under the Conservatives. Millions are struggling to get by, while Theresa May hands £1 billion to the DUP to keep herself in a job.”
Employment Minister Damian Hinds welcomed the jobs figures, saying: “Unemployment is low, employment is high and there are over three-quarters of a million vacancies.
“This is great news for Britain and for millions of ordinary working families.”