Half of UK workers suffered pay decline in real terms last year

Pandemic has hit sectors such as hospitality and retail with more low-paid roles hardest

A boarded up retail unit in the city of Preston. Weak pay for younger, lower-paid people in the UK is set to continue beyond 2021, according to a Resolution Foundation study. Reuters

Half of all UK workers saw their pay fall in real terms last year, extending a decade-long blight on living standards for around 14 million people, according to the Resolution Foundation.

In a report published on Monday, the research group said the plight of those hit hardest by the pandemic, chiefly the young, contrasts with official data showing a sharp rebound in average earnings following the first coronavirus lockdown last spring.

The gulf is due to the disproportionate impact of the crisis, which has destroyed hundreds of thousands of jobs in sectors such as hospitality where workers are typically young and low-paid.

Figures due on Tuesday are expected to show wage growth accelerating to a 13-year high, reflecting the fact that the average person still in employment is higher paid than before the crisis.

The Resolution Foundation said the hit to young people threatens to scar their prospects for years to come, with weak pay likely to continue beyond 2021 as firms emerge from the deepest slump for more than 300 years.

“Returning to employment growth and a tight labour market as quickly as possible, alongside continued increases in the minimum wage to support lower-paid workers in particular, will be crucial for boosting living standards as the recovery takes hold,” economist Hannah Slaughter wrote in the report.