North-East - only region to suffer fall in average weekly earnings and rise in unemployment

Wages down, unemployment up

Wages down, unemployment up

First published in News
Last updated
The Northern Echo: Photograph of the Author by , Parliamentary Correspondent

PAY continues to plunge in the North-East - sparking fears the economic recovery is not being felt in people’s pockets.

Average weekly earnings fell by 7.3 per cent over the past year, official figures show – leaving full-time workers a staggering £36 worse off a week, even before inflation.

The pay crisis is more alarming for North-East women, who have lost £49 a week – or 10.7 per cent of weekly earnings – compared with same period of 2013.

The steep decline puts the North-East out of step with the rest of the country, where earnings are creeping up in cash terms, although by less than rising prices.

Meanwhile, in Yorkshire, workers are better off than a year ago – after average weekly pay rose by £18, or 3.6 per cent, which is more than inflation.

In the Commons, David Cameron came under pressure over falling North-East pay on the same day as the latest jobless figures presented a mixed picture for the region.

Those in work have risen by 15,000 over the last three months and the employment total has leapt by 47,000 on one year ago.

But the North-East is the only part of the UK where unemployment is also increasing – by 6,000 over the past three months and by 1,000 year-on-year.

The apparent paradox is explained by tens of thousands of people coming off long-term sickness benefits, after controversial ‘back to work’ tests, and into the jobs market.

During prime minister’s questions, South Shields Labour MP Emma Lewell-Buck pointed out that Ken Clarke recently admitted people were not feeling “any sense of recovery.”

And she asked: “The Office for National Statistics has confirmed today that full-time workers in the North-East are £36 a week worse off than they were last year. Does the Prime Minister agree with his Cabinet colleague?”

In reply, Mr Cameron replied: “There are 47,000 more people in work in the North-East than there were a year ago.

“The best route out of poverty is work - and what that needs to be followed by are the tax reductions this Government are bringing in to make sure that people are in work and better off in work. That is going to make a difference.”

But Charles Levee, senior economist at the Work Foundation, suggested an “unprecedented” fall in the jobless count across the country was not benefiting those in work already.

And he raised the alarm over a sharp rise in the number of “distressed self-employed”, people forced to chase contracts, rather than fill traditional permanent posts.

In the North-East, the number of self-employed is up 7.6 per cent year-on-year – while the rise in full-time workers was only 2.2 per cent.

Mr Levee told the BBC: “There is a fundamental question. Why are real wages falling, why are people’s living standards decreasing?

“Wages for the self-employed are falling most quickly – there are more people chasing after same number of contracts, rather than setting up new businesses.”

Across the UK, the jobless count fell by 161,000 to 2.16m in the three months to April – the lowest total for five-and-a-half years - bringing the unemployment rate down to 6.6 per cent.

Meanwhile, the number of people in work rose by a record 345,000, to 30.5m. In the past year, 780,000 jobs have been created.

Comments (7)

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9:40am Thu 12 Jun 14

John Durham says...

The statistics game continues but the reality is working people are worse off now than when this government came to office and though the apparent growth in jobs is welcome its obvious these jobs are in low pay sectors like retail and services and not in areas the government promised when it talked of re-balancing the economy.
Unless re-balancing the economy means looking after the bankers, financial speculators and millionaires in the South East and making everyone else poorer.
The statistics game continues but the reality is working people are worse off now than when this government came to office and though the apparent growth in jobs is welcome its obvious these jobs are in low pay sectors like retail and services and not in areas the government promised when it talked of re-balancing the economy. Unless re-balancing the economy means looking after the bankers, financial speculators and millionaires in the South East and making everyone else poorer. John Durham
  • Score: 6

10:19am Thu 12 Jun 14

Voice-of-reality says...

Of course the comment above would have more credence if only the south east was prospering. That all other regions are showing signs of growth instead suggests that the problem lays in the 'odd one out'. Time, and I will say it again, for the North east to stop wallowing in the past, to stop harking back to a golden era of coal (that never was for at least two generations) and to actually get a grip and embrace the future. If the rest of the country can embrace prosperity - why can't this region?
Of course the comment above would have more credence if only the south east was prospering. That all other regions are showing signs of growth instead suggests that the problem lays in the 'odd one out'. Time, and I will say it again, for the North east to stop wallowing in the past, to stop harking back to a golden era of coal (that never was for at least two generations) and to actually get a grip and embrace the future. If the rest of the country can embrace prosperity - why can't this region? Voice-of-reality
  • Score: -2

10:53am Thu 12 Jun 14

John Durham says...

Sadly it is not only the North East that is suffering VoR. In fact it would be truer to say that if it were not for the house price boom in London and the South East due to massive housing shortages that very little growth would be seen anywhere. But certainly outside that area the supposed growth in the UK has simply not filtered through and there is little evidence of this supposed prosperity you mention.
Sadly it is not only the North East that is suffering VoR. In fact it would be truer to say that if it were not for the house price boom in London and the South East due to massive housing shortages that very little growth would be seen anywhere. But certainly outside that area the supposed growth in the UK has simply not filtered through and there is little evidence of this supposed prosperity you mention. John Durham
  • Score: 2

11:40am Thu 12 Jun 14

David Lacey says...

The left are between a rock and a hard place. The country is now beginning to emerge from 13 years of the disaster that Labour inflicted upon it and there are 2 million more people working in the productive private sector whilst the unproductive public sector continues to shrink. Even the IMF has grovelled and offered apologies for its unfounded previous criticisms. No matter how much good news filters through, the left will still find reasons to twist and turn. We have strong growth in manufacturing, the building industry is going like the clappers and services are in excellent shape. Meanwhile the left wing dominated eurozone wallows in despair.
.
Had Osborne had the guts to make even deeper cuts in the bloated public sector we could have got to this point 2 years ago.
The left are between a rock and a hard place. The country is now beginning to emerge from 13 years of the disaster that Labour inflicted upon it and there are 2 million more people working in the productive private sector whilst the unproductive public sector continues to shrink. Even the IMF has grovelled and offered apologies for its unfounded previous criticisms. No matter how much good news filters through, the left will still find reasons to twist and turn. We have strong growth in manufacturing, the building industry is going like the clappers and services are in excellent shape. Meanwhile the left wing dominated eurozone wallows in despair. . Had Osborne had the guts to make even deeper cuts in the bloated public sector we could have got to this point 2 years ago. David Lacey
  • Score: -7

12:43pm Thu 12 Jun 14

nigel d says...

I see some people's heads are still stuck up their ars€$.
They need to remove the blinkers and wake up
I see some people's heads are still stuck up their ars€$. They need to remove the blinkers and wake up nigel d
  • Score: 2

4:47pm Thu 12 Jun 14

David Lacey says...

Correct Nigel. You are of course referring to the crazies from the left.
Correct Nigel. You are of course referring to the crazies from the left. David Lacey
  • Score: 0

10:49pm Thu 12 Jun 14

nigel d says...

David Lacey wrote:
Correct Nigel. You are of course referring to the crazies from the left.
Silly boy
[quote][p][bold]David Lacey[/bold] wrote: Correct Nigel. You are of course referring to the crazies from the left.[/p][/quote]Silly boy nigel d
  • Score: 2

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