UK Sees Largest Real Wage Drop in 21 Years... Public Sector Union Announces Strike

Real wages from March to May down 2.8% year-on-year
Impact of soaring food and energy prices

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Hyun-jung] Due to inflation driven by rising food and energy prices, real wages for workers in the UK have fallen at the steepest rate in over 20 years. In response to low wage increases compared to rapid price hikes, the public sector union has also announced plans for a long-term strike.

According to the UK Office for National Statistics on the 19th (local time), real wages adjusted for inflation from March to May this year decreased by 2.8% compared to the same period last year. CNN reports that this is the largest drop since the Office for National Statistics began compiling data in 2001.

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Recently, countries around the world have experienced sharp price increases due to the Ukraine war, climate change, and supply chain issues. In May, the UK's consumer price inflation surged 9.1% year-on-year, marking the highest level in 40 years for two consecutive months. This is the highest among the Group of Seven (G7) countries. Despite monetary tightening such as interest rate hikes, the UK's inflation rate is expected to exceed 11% in the second half of this year.

According to data released by the statistics firm Kantar on the same day, food prices rose nearly 10% over the recent four weeks ending on the 10th. This means that British people are spending an additional ?454 (about 710,000 KRW) on food and daily necessities this year. The energy expenditure per household in the UK surged 54% in April, and energy research firm Cornwall Insight estimates that it will reach ?3,000 (about 4.7 million KRW) annually starting from October, when winter begins.

Additionally, the Bank of England (BOE), the UK's central bank, forecasted that disposable income for its citizens will shrink at the second largest rate since 1964 this year.

In this situation, the UK's largest labor union, the public sector union, decided to launch additional strikes after the government proposed a 5% pay raise for 2.5 million public sector workers. The government also proposed wage increases starting next year of 4% for nurses, 4.5% for doctors, and around 5% for police officers and experienced teachers.

According to Bloomberg News, the unions said the pay raise approved by the Boris Johnson cabinet falls short of expectations and announced plans to strike over the coming months. Unions in the railway, telecommunications, and postal sectors voted in favor of the strike, and it is expected that the education and healthcare sectors will join as well.

This content was produced with the assistance of AI translation services.