Britain's workers are getting poorer.
Wage growth is not expanding at a pace that keeps up with the rising cost of living, according to a report by the think tank Resolution Foundation.
Salaries of those of a working-age grew at a slower than expected pace and this poses a problem for people being able to afford everything from food and utility bills.
"Using a mixture of outturn data and Office for Budget Responsibility (OBR) projections, we estimate that income growth has slowed substantially in 2016-17, with typical income 1.2 per cent higher than the year before," said the Resolution Foundation report's authors Adam Corlett and Stephen Clarke.
"For working-age households we project growth to have more than halved to only 0.5 per cent, though falling costs for mortgagors may ameliorate the impact somewhat. Income growth for lower income working-age households may have particularly weakened due to the combination of rising prices and frozen working-age benefits, despite the welcome introduction of the National Living Wage and another fall in the number of workless households."
And here is the chart:
The Resolution Foundation pointed out that while household incomes are above the peak last seen before the credit crisis of 2007/2008, average earnings are still "£3,100 below where they would have been if the pre-crisis growth trend had continued."
In other words, wage growth is still playing catch up:
And it is only going to get worse:
"Taking the November 2016 economic forecasts of the OBR together with stated policy on taxes and benefits, we are able to project the implied path of household incomes across the distribution. We find two distinct, and worrying, results: income growth is set to slow to extremely low levels and in a way that is highly regressive, with income falls for poorer households," says the report.
"Overall, the factors underpinning the end of the living standards mini-boom this year look set to persist, resulting in very weak growth of 0.3 per cent a year in median working age household income over the next four years, once we account for housing costs."
