Belfast Telegraph

Northern Ireland wages fall 5% in seven years as UK average pay suffers double-digit dip

By John Mulgrew

Wages for Northern Ireland workers have fallen over the past seven years, but at the lowest rate of any UK region, according to a report.

Pay here has dropped by 5%, taking into account inflation and cost of living rises since April 2008.

However, Northern Ireland was still the best performing area out of a total of 12 regions, according to the report from the GMB union.

It said the average wage for full-time workers here in April 2008 was £25,500.

That increased to £29,500 in April this year, but the increased cost of living means pay is relatively lower.

According to the GMB, "cumulative inflation" has been around 20% over the course of the last seven years.

Wages dropped by an average of 13.6% across the UK.

The biggest fall was in London, where the real value of average pay has dipped by 23.2%

Economist John Simpson (below) said he was not surprised that wages in Northern Ireland had fallen by a smaller amount than any other UK region over the past seven years.

"I think what has happened is that the recession has mainly hit higher earners and those able to claim overtime and bonuses," he added. "But a region like Northern Ireland is more likely to simply flatline.

"I'm not surprised that the fall has been slightly less in Northern Ireland.

"But bear in mind, we are starting low and in 2008 were probably at around 80 to 85% of the national average wage."

Mr Simpson added that the 5% fall in real income over the period was likely to have shrunk even further in the past six months because of extremely low inflation that was itself fuelled by low food and petrol prices.

"If you are measuring it up to December 2015, when we had flat inflation, then the gap would be less significant.

"In the past six months, we have had low food and petrol prices. The benefits of the fall in inflation have been evenly spread to our advantage."

The data on wages was taken from the Annual Survey of Hours and Earnings from the Office for National Statistics (ONS).

It was based on a 1% random sample of employee jobs taken from HMRC records.

Paul Kenny, general secretary of the GMB, said that while we have seen a growth in the number of workers as the population has grown, "average pay has simply not kept pace with inflation".

"Since 2008, the cumulative inflation has been 26%. During this period, pay in the UK has gone up by 7%, which has left the pay of the average full-time worker down by 13.6% in real terms," Mr Kenny insisted.

"This has had a deflationary impact on the economy and has also affected the tax take by the Chancellor to pay for essential public services."

He added that with Chancellor George Osborne's prediction that the UK economy will grow over the next five years, "workers will want to see that growth translating into pay rises above inflation".

Belfast Telegraph