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UK Pay Inequality Gap Widening – CEBR

A report by the Centre for Economics and Business Research (CEBR) shows there is a growing gap in pay between high earners and low earners, while real pay growth for workers across all percentile levels is close to zero. Against the backdrop of a significant cost-of-living crisis, the report by the economics consultancy says employees in the 10th percentile have seen their wages rise by just 1% since January 2022. The CEBR says this has led to cases of “families making impossible choices” between food consumption and mortgage payments. Meanwhile, workers in the 99th percentile have seen an average annual pay growth of around 10%, with workers in the 50th percentile or above achieving at least a 5% average annual pay growth. Due to price inflation ranging between 5.5% and 9.4% over the first half of 2022, the majority of employees at all levels of the pay scale’s real pay growth is close to zero, although the report highlights this is especially damaging for workers at the lower end of the scale. This year has already seen rising opposition to executive pay rises, with investors becoming increasingly willing to challenge executive remuneration and businesses being pressured to pay workers fairly. The CEBR said: “Looking at the lowest earners, following higher pay growth over the past couple of years, their pay has flatlined in 2022. Problematically, this has coincided with record rises in the costs of essentials.” 

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