Workers in the UK have seen the biggest fall in real wages than anywhere in the world's top 10 developed economies, according to a new study.
The Trade Union Congress (TUC) said that between 2007 and 2011 real wages fell by 4.5 per cent in the UK, higher than in countries such as Italy and Japan, while in Australia and Canada there were increases of 6.9 per cent and 5.4 per cent, respectively.
Most of the decline was in 2011 - the coalition government's first full year in office, the research found. The TUC said the government's austerity program had made the squeeze on living standards even tighter by cutting tax credits and welfare support for low and middle-income families.
TUC general secretary Frances O'Grady said: "While most countries have suffered periods of negative wage growth, no one has witnessed such a marked decline as the UK".
"This government's blind obedience to self-defeating austerity has ensured that we are leading the way when it comes to the squeeze on living standards.
"Businesses desperately need people to spend money but employees are cutting back as their wages are squeezed and the public sector, far from making up the gap, is being slashed too.
"Unless we get stronger economic growth with rising real wages, consumer spending will remain weak and the economy will continue to flat-line."
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