Think tank says fall in wages could be worse than reported
10 Jul 2014
According to the Resolution Foundation, official figures on the fall in real earnings of households may have been underestimated.
Data published by the Office for National Statistics (ONS) was analysed by the think tank, which says the ONS report may have overstated real-term household incomes by up to 20%, meaning a much steeper decline.
Critical to this reappraisal is a measure of wage growth among the 4.5 million self employed people in the UK.
Senior analyst at the Resolution Foundation, Laura Gardiner, said: ‘What we know about earnings is central to our understanding of the recovery and the timing of interest rate rises so it’s crucial that we equip ourselves with the best possible wage measure.
‘It’s also the case that the self employed have greater flexibility to respond to lower demand by making ever deeper cuts to their earnings’.
Figures show that over 700,000 people have declared themselves self employed since 2008, making them one in seven of the total UK workforce.