Falling real wages in the UK

David Blanchflower, Stephen Machin 12 May 2014

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There have been unprecedented falls in real wages in the UK since the start of the recession triggered by the financial crisis of 2008. This did not happen in previous economic downturns – median real wage growth slowed down or stalled, but it did not fall. Indeed, in past recessions, almost all workers in both the lowest and highest deciles of the wage distribution experienced growing real wages. It was the unemployed who experienced almost all the pain – they lost their jobs and much of their incomes, and many were unemployed for a long time.

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Topics:  Labour markets Poverty and income inequality

Tags:  US, unemployment, wages, Inequality, UK, Great Recession, real wages

The real wage–productivity nexus

Jennifer L. Castle, David F. Hendry 13 January 2014

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The Great Recession has produced falling real wages (Elsby et al. 2013). There has not been the ‘usual’ unemployment reaction. As such, it may seem that the wage inflation/unemployment trade-off has shifted. Our recent work suggests otherwise (Castle and Hendry 2013).

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Topics:  Labour markets Productivity and Innovation

Tags:  productivity, real wages, wage inflation