Whether wages have passed their pre-crisis level depends on whether you include bonuses
19th Feb 2020
Average pay has finally surpassed its pre-crisis peak.
True, for average weekly earnings in GB, if you don’t count bonuses. Average weekly total earnings including bonuses is still below the pre-crisis peak.
“Average UK wages top pre-financial crisis levels.”
The Guardian, 18 February 2020
“Wages back above pre-economic crisis levels.”
BBC News, 18 February 2020
“Average pay has finally surpassed its pre-crisis peak.”
The Times, 18 February 2020
The Office for National Statistics (ONS) has published data on earnings which was reported widely across the media.
The figures show that average weekly earnings for employees in Great Britain in December 2019 exceeded the previous peak reached in August 2007.
This data is adjusted for the change in prices (inflation) meaning it reflects a real increase in the purchasing power of workers. The ONS does this by converting the earnings from each period into 2015 money. So the figures reflect the value of earnings in 2015, not what they actually are worth now or when they were being paid out.
In December 2019 weekly earnings averaged £473.68 in 2015 money, higher than the previous peak of £473.33 in August 2007.
But there’s one thing to bear in mind with saying that pay is now at a record high. The figures reported by the media represent what’s called “regular pay”. This doesn’t include bonuses, and so doesn’t actually reflect the total average amount that all employees across the economy are earning. (Not all employees earn bonuses, but some do.)
When you include bonuses, and look at “total pay”, the average weekly wage of £502.74 is still below the February 2008 peak of £522.15 (in 2015 money).