Average weekly earnings annual growth figures published by the Office for National Statistics (ONS) last week have led to a number of seemingly contrasting claims on social media.
In a tweet, BBC News stated that the figures show “UK wages [rose] at fastest rate since records began”.
The tweet has since had a community note (which Twitter describes as “empowering [users] to collaboratively add context to potentially misleading tweets”) attached to it, which says “Headline is misleading. The article itself states that: “Regular pay grew by 7.8%. Inflation, which measures the pace at which prices are rising remains relatively high at 7.9%.
“Described in “real terms” (that means taking inflation into account), this is a pay cut.”
Yet in another tweet, work and pensions secretary Mel Stride claimed that “wages are rising in real terms”.
None of these claims about the data are necessarily wrong, as they all refer to different measures, but each would benefit from additional context.
Statistics on their own have limitations. The way they are presented is a crucial part of how they are interpreted and understood by the public. If data is presented without context or caveats, it can give an incomplete or misleading picture. As the Office for Statistics Regulation states in their Regulatory Guidance, selective use of data or use of data without appropriate context can lead to misuse which damages public trust.
Honesty in public debate matters
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Wages have risen in nominal terms
BBC News’ tweet refers to a record increase in wages, which is accurate when looking at nominal regular pay (pay excluding bonuses, not adjusted for inflation), which increased by 7.8% in April to June 2023, compared to the same period the previous year.
This is the highest increase since current records began in 2001 (historic data showing quarterly wage growth is available through the ONS, but it is not comparable with current figures).
Nominal total pay (pay including bonuses, not adjusted for inflation) increased by 8.2% over the same period, which is the highest growth rate outside of the pandemic, when total pay growth peaked at 9.2% in April to June 2021.
Real terms growth varies depending on the measure
The community note attached to the tweet claims that the BBC News headline is “misleading” because it does not explain that regular pay grew at a slower rate than inflation.
When looking at the Consumer Prices Index (CPI)—the measure which the government has commonly referenced when talking about inflation over recent months—it is correct that inflation was higher than pay growth.
According to the ONS, using this measure real regular pay (pay excluding bonuses, adjusted for inflation) fell by 0.6% in April to June, compared to the same period the previous year.
Real total pay (pay including bonuses, adjusted for inflation) saw a smaller decrease of 0.2% over the same period.
However, using the ONS’ headline measure of inflation—the CPI including owner occupiers’ housing costs (CPIH)—presents a different picture.
Real regular pay adjusted using CPIH increased by 0.1% compared to the same period last year, while real total pay increased by 0.5%.
These figures are what Mr Stride was likely referring to when he claimed that “wages are rising in real terms”.
Image courtesy of Sarah Agnew