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What has happened to pay in the UK?

Graham Watson

17th March 2023

In the current environment, with many people striking, the BBC looks at the issue of what has happened to average earnings and highlights the fact that real pay has failed to keep up with average earnings in a number of sectors, notably teachers and nurses. And it's this that has precipitated the current round of strike action.

However, what has caused this? This is a much more interesting question and you might want to have a think about the factors that lie behind it.

Please read: What has happened to pay in the UK?

Leading supermarkets seem to be engaged in a bidding war to attract and retain staff. Aldi today announced that is is giving 28,000 workers pay rise - making it the top-paying UK supermarket. The supermarket group will lift starting pay to £11.40 an hour nationally and to £12.85 in Greater London. This is well above the statutory national minimum wage.

Please read: Aldi raises pay as supermarkets battle for staff

A recurrent theme in the sector is the seemingly never-ending merry-go-round of wage rises. It's a feature of oligopolistic markets and in this case, it's Aldi raising their wages, keeping up with others in the sector, but also in hospitality too.

It suggests that labour markets are pretty tight - not something you'd usually associate with an economy growing as slowly as the UK's.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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