Workers '£1,600 poorer since 2009'

Workers are £1,600 worse off on average than three years ago because the "dire" state of the economy has pushed down wages, according to a new study.

The TUC said losses will continue to mount in the coming years, predicting that real terms wage losses will reach an average of £8,500.

The research, which tracks wage and inflation data between 2009 and 2012, as well as forecasts from the Office for Budget Responsibility from 2012 onwards, says that workers are just a quarter of the way through the UK's 12-year wage "dive".

Incomes have fallen sharply in real terms over the last three years as wages have failed to keep up with the rising cost of living, said the report.

TUC general secretary Brendan Barber said: "The dire state of the economy has pushed down wages. Workers today are on average nearly £1,600 poorer than they were three years ago.

"Even when wages start to pick up again it will take years to undo the damage wreaked by austerity and high inflation. Unless things change, the UK's 12-year wage dive will continue until 2021 and cost the average worker around £8,500. The loss of income will be even worse for families receiving vital tax credits.

"Ordinary workers did not benefit enough from the proceeds of growth in the run-up to the crash as profits were hoarded by shareholders and top executives. A return to business as usual will simply postpone the next living standards crisis.

"It is clear that austerity isn't working. We need a new economic approach that delivers for all workers and their families."