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.

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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.