Average wages in
Wages could be more than 20% lower than currently estimated across the whole workforce once
A real-terms fall of 10% in average wages since 2008 would increase to more than 12% if a 27% fall in self-employed incomes is taken into account.
Before the Bank of
Officials on the Bank's monetary policy committee, which sets interest rates, are understood to be concerned that the exclusion of self-employed incomes from official figures hampers their efforts to gauge when to increase the cost of credit.
She said: "What we know about earnings is central to our understanding of the recovery and the timing of interest rate rises so it's crucial that we equip ourselves with the best possible wage measure." More than 700,000 people have declared themselves self-employed since 2008, bringing the total number of people who work for themselves to 4.5 million or one in seven of the total. Over the same period only 260,000 workers have been added to the ranks of the employed on a net basis, said the report.
The thinktank believes wage levels were underestimated in the immediate aftermath of the financial crash as self-employed people maintained healthier incomes than employees on average. But once the recession was under way and newly unemployed workers switched to self-employment, usually to take on part-time roles, average wages fell.
Changes in the self-employed workforce - with more women and more workers from lower-paid sectors - are also likely to have had an effect.
"It's also the case that the self-employed have greater flexibility to respond to lower demand by making ever deeper cuts to their earnings," she said.
Resolution said the effect was similar whether the median or mean calculation of wages was used.
While self-employment is counted when calculating the number of new jobs in the economy, the incomes of self-employed people are excluded, he said.
The situation is of growing concern to policymakers who want to understand the strength of the recovery. The Bank's monetary policy committee is expected to raise interest rates before the end of 2014 despite concerns that wages remain well below their peak and pay awards remain weak.
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