Share of income spent on wages down

CashThe share of national income going to wages has fallen over the past 30 years, while more has gone on company profits, especially those in financial services, according to a new study.

The TUC said the success of the financial services sector had come at the expense of workers, as well as other industries.
The share of national income going to wages had fallen from 59% to 53% since the early 1980s, while the proportion going to profits had increased from 25% to 29%, said the report.

Workers on median incomes were £7,000 a year worse off than 30 years ago, the research showed.

The shift followed the decline of industries spending a high proportion of turnover on wages, such as manufacturing, and the expansion of new industries with a far higher profit margin, said the TUC.

General Secretary Brendan Barber said: "You'd expect business owners across the UK to have benefited from the tens of billions of pounds lost from people's pay packets, but instead the entirety of those lost wages have simply lined the profits of financial firms.

"While rising City profits has been good news for a small number of shareholders and the Treasury tax-take, it's been a disaster for the wider economy. The City's hoarding of profits has stifled other industries, reduced business investment and made all but a tiny rich clique of the UK workforce worse off.

"Everyone now agrees we need to rebalance the economy. But the main ways to achieve this - rising investment, more high value manufacturing and engineering, and faster growth in new creative industries - are all being held back by the continuing dominance of the City.

"If the government really want a more balanced economy that all workers and businesses can benefit from they need to be more courageous in standing up to the City. Ministers mustn't forget that financial firms did more to cause the crash than any other industry, and will block any reform that weakens its influence."
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