Brits suffered the biggest wages drop in the G7 but French and Germans enjoy pay rises despite working fewer hours than we do

• Between 2007 and 2012 wages in UK fell by 6.1% in real terms
• Pay rose over the same period in Canada, France and Germany
• Brits worked 1,625 hours in 2012 but France 1,482 and Germany 1,406
• Youth unemployment more than doubles in Eurozone countries

By Matt Chorley, Mailonline Political Editor

Britain has suffered the biggest squeeze on wages of any of the richest G7 countries, new research revealed today.
While other major economies have seen pay levels return to pre-crash highs, wages in the UK were 6.1 per cent lower in real terms in 2012 than in 2007.
To add to the misery, people in Germany and France who have seen growth in the salaries actually work fewer hours than Brits.

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Between 2007 and 2012, wages in the UK fell by 6.1 per cent in real terms, the biggest drop of any of the G& richest countries

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Brits work longer hours than Germans and the French, who have seen a big increase in their wages

The UK has not seen the surge in unemployment which has blighted the economies of many European countries.

At the end of last year 7.2 per cent of people were out of work in Britain, half the level seen in Portugal and a quarter of the figure seen in Spain (25.8 per cent) and Greece (28 per cent).
Latest figures last week showed that the unemployment rate in the UK had fallen even further to just 6.9 per cent.

 

However, a new analysis comparing the UK to other countries suggests pay has been squeezed at the expense of keeping jobless numbers down.
It suggests employers have avoided laying off staff by cutting or freezing pay in the wake of the 2007 financial crash.

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The average unemployment rate varies from 28 per cent in Greece to just 3.7 per cent in Japan. Figures come from 2013

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George Osborne has set a target for full employment in the UK, but remains behind Germany, Canada and Japan for jobs figures

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There have been stark increases in youth unemployment in many countries hit by the Eurozone crisis

The Office for National Statistics said that wages have been falling ‘markedly’ since 2007, and by 2012 were 6.1 per cent lower in real terms five years earlier.
At the same time, wages were 4 per cent higher in Canada, 2.8 per cent higher in France and 3.1 per cent higher in Germany. Wages in the US were down only 0.2 per cent over the same period.
The ONS said: ‘These trends point to differing economic conditions across the G7 countries. The notable fall in real wages for the UK compared with the US suggests that the labour market adjustment following the downturn has perhaps taken place more on the wages side for the UK – with nominal wage growth being less than the rate of inflation – and on the employment side for the US, with a notable increase in the unemployment rate. 
The European statistics body Eurostat has also compiled data on average earnings across the continent.
It shows that annual earnings dropped off in the UK from 2008 – 2009 before recovering again in 2010 but not returning to 2008 levels by 2011.
At the same time Sweden and Germany both saw a fall in earnings after 2008 but wage levels have risen consistently in subsequent years.

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Canad and France have seen real terms increases in pay in every year since 2009

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The Danes enjoy some of the highest wages in Europe, with Bulgarians receiving the lowest

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By dividing the total national income among the number living in the country, researchers can compare the wealth of individuals in different parts of the world

Pay has fallen for people in the UK, despite them working longer hours.
Brits worked 1,625 hours in 2012, well ahead of France (1,482 hours) and Germany (1,406 hours).
Amongst the G7 leading economies, Americans worked the longest hours - 1,787 hours - in 2012, overtaking Italy on 1,772 hours.
Chancellor George Osborne has set an ambition for ‘full unemployment’. At the end of 2013, 71 per cent of people in the UK were in work, up from 69 per cent in early 2010.
But the UK remains behind Germany, Canada and Japan among the G7 – the world's leading developed economies.
Almost 9 in 10 new jobs created last year in the UK went to Brits. Between October to December 2012 and October to December 2013 the total number of people in work employment in the UK increased by 425,000 to reach 30.24million.
Of those, 367,000 UK nationals found work compared to 54,000 non-UK nationals.
There have been stark increases in youth unemployment in many countries hit by the Eurozone crisis.
In early 2008, 22.5 per cent of young people were out of work in Greece but the figure had rocketed to 58 per cent by the third quarter of 2013.
Over the same period the figure rose from 20.7 per cent to 56.7 per cent in Spain and from 20.7 per cent to 49.7 per cent in Italy. In the UK the figure increased from 13.8 per cent in 2008 to 20.7 per cent last year.