- After three decades of strong growth, real wages peaked in 2009. Since then inflation has outstripped wage increases in cash terms.
- In real terms, the average earnings of UK employees in 2012 were at 2003 levels.
- Employees working in London earn more on average than UK employees and their average real earnings fell less rapidly from 2010 to 2012.
- The weakness of real earnings has important implications for people and households, businesses, government spending and the economy as a whole.
The article looks at how the average earnings of employees in London and the UK changed between 2002 and 2012, once adjusted to take account of inflation. It also looks at changes in the average income of self-employed people in real terms. For employees, the analysis compares real earnings of full-time and part-time workers in the public and private sectors.