Average earnings decline by 10.4% between 2007 to 2017 despite 3.5% rise in GDP

BudgetPay

10.4% decline in value of average earnings while GDP per head grew by 3.5% since 2007 points to loss of workers’ bargaining power as employers enjoy effective impunity to hostility to union rights at work. “As a result of economic sabotage by employers to their workers’ rights we have since 2007 a bigger number of workers in the economy sharing in proportionate terms a smaller pie”, says GMB Southern Region

A new study from GMB Southern Region has found that the value of average earnings between 2007 and 2017 in real terms has declined by 10.4% when inflation of 31.7% is taken into account. Meanwhile GDP per capita over the same period has risen by 3.5%. This data points to the loss of the bargaining power of workers as employers enjoy impunity to hostility of union rights at work.

When looking at the 2 digit occupational groups, health professionals have seen the biggest drop in annual pay. The mean annual pay for a health professional in 2007 was £67,459, but in 2017 the mean figure was just £41,494. A decrease of 53.3%. The first table below sets out the position for the main 25 occupational groups between 2007 and 2017.

Other occupations to see a significant drop in annual pay include health and social care associate professionals, who have seen a 23.7% drop in pay since 2007. Other managers and proprietors have seen a decrease of 21.9%, protective service occupations a decrease of 16.3%, science, engineering and technology associate professionals saw a decrease in 15.3%, business, media and public service professionals, a decrease of 14%, process, plant and machine operatives, a decrease of 12.9%, teaching and educational professionals, a decrease of 12.2%, textiles, printing and other skilled trades a decrease of 11.8%, and caring personal service occupations have seen a decrease of 11.4% to their annual pay since 2007 after inflation..

Only two occupational groups are not below the annual pay levels of 2007. One, sales and customer services occupations, has kept pace with inflation. This is likely to be linked to increases in the national minimum wage/living wage. The other, culture, media and sports occupations, has shown a growth of 8.6%.

Meanwhile during the same period GDP per capita has from £28,662 in 2007 to £29,674 in 2017, an increase of 3.5%. The second table below sets out the GDP growth for each year since 2007.

Paul Maloney, GMB Regional Secretary said, "Since 2007 the numbers in employment has grown by 2.26 million.

"Over this period GDP has recovered. In gross terms it is £200bn bigger in 2017 compared to 2007. This is a growth of 11.5%. The growth in GDP per capita over this period has been 3.5%.

"However, in real terms the value of average earnings between 2007 and 2017 are down by an average of-10%. For some occupational groups the decline in the value of their average earnings is much steeper.

"Over the same time the share of wages and salaries as a proportion of GDP has fallen by 1.6%.

"So in effect we have a bigger number of workers in the economy sharing in proportionate terms a smaller pie.

"One factor that will have contributed to the lower share of wages and salaries as a proportion of GDP is the effective impunity employers face in their hostility to workers combining to force their employer to collectively bargain with them for a fair deal at work. Employers can sack the ringleaders of workers trying to unionise and get away with it.

"This impunity has tipped the bargaining scales too far in favour of the employers. GMB contend that it's to the detriment of the wider economy. As a consequence, consumer spending is weaker and the tax raised from wages is lower.

"It is essential that this effective impunity employers face in their hostility to workers combining to force their employer to collectively bargain with them is challenged.

"GMB consider that it should be a criminal offence for managers to interfere with the human rights of workers to be union members and to secure collective bargaining rights. There should be severe penalties including fines and imprisonment for what is a crime of economic sabotage."

Contact: Paul Maloney 07801 343 839 or GMB Southern Press Office on 07970 114 762

Notes to editors

1) Source: Annual Survey of Hours and Earnings, Office for National Statistics

2) The figures are annual Mean salary for all Full-time employees

3) % change figures take into account an inflation rate of 31.74% from April 2007 to April 2017.

4) The 2007 ASHE data uses Standard Occupational Classification 2000 and the 2017 data uses Standard Occupational Classification 2010.

Gross Domestic Product: chained volume measures: Seasonally adjusted £m

Source: GDP first quarterly estimate time series

Population data source: Population estimates; ONS Crown Copyright Reserved