Week 11, 2012: UK Weekly Average Wage

Summary: Despite a tiny improvement in real weekly average wages in January, the trend continues to be downwards, with the gap between public and private sector pay showing no sign of closing.

What does the chart show? The chart shows the seasonally adjusted real average weekly wage for the whole of the private sector (in blue) and the public sector (in red). Past wages have been adjusted using the CPI measure of inflation to be measured in today's money.

Why is the chart interesting? Weekly wages for both the public and private sector rose steadily between 2000 and 2008, leaving the "average" worker a significant £80 per week better off. Since then, however, real wages have declined, with wages in the private sector falling faster than in the public sector. Despite a very minor increase in real wages in January (probably a monthly fluctuation rather than a legitimate improvement), the average wage for the private sector today is the same as it was in the summer of 2004 (or 2005 for the public sector).

On the other hand, unemployment figures this week show that employment in the public sector fell by 37,000 over the past quarter to reach the lowest point since June 2003, compared to the private sector where 45,000 new jobs were created.