July 9, 2014 / 9:36 PM / 5 years ago

Official data may understate any recovery in UK wages - think tank

LONDON (Reuters) - A recovery in British wages may be steeper than official data suggest because the figures do not cover some 4.5 million self-employed workers, a think tank report showed on Wednesday.

The statistical blind spot also means the wage decline for all workers from 2008 to 2012 was probably much greater than official figures show, the Resolution Foundation said, arguing for a more comprehensive measure of pay.

A record 30.5 million Britons are now working, but that includes a steadily increasing number of people who are registered as self-employed. They tend to earn less than employees.

The Resolution Foundation said this meant average earnings of all workers - including the self-employed - probably fell by around 10 percent from 2008 to 2012, rather than the 8 percent shown by the official data.

Conversely, the data also risk understating any upturn in earnings as the economic recovery gains pace.

“Our analysis suggests that at different times we may have both overstated and understated, often significantly, how much workers have been earning,” said Laura Gardiner, senior analyst at the Resolution Foundation.

“It should be possible to construct a more comprehensive and timely way of measuring wages across the workforce and we hope to provoke a much-needed debate about how best to do this.”

Official data have shown weak annual wage growth, which fell to just 0.9 percent in April, although partly due to tax changes last year. But even first-quarter wage growth of 1.9 percent barely matched inflation in the same period. [ID:nL5N0OS21X]

Reporting by Andy Bruce

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