The North East of England has faced deep-seated structural economic challenges following the decline of traditional heavy industries such as shipbuilding and coal mining. In the decade following the 2008 financial crisis, the region struggled with lower productivity growth and lower average weekly earnings compared to the UK average.
Between 2013 and 2022, the local economy saw various challenges. Public sector employment, which historically accounted for a high share of jobs in the region, was constrained by national fiscal austerity. Although some service sectors and advanced manufacturing (such as automotive production) expanded, many new jobs created were in lower-paid, part-time, or temporary roles.
Inflationary pressures also eroded wage growth. In particular, a spike in inflation following the 2016 EU referendum and the supply chain disruptions of 2021–2022 significantly reduced the purchasing power of local workers. While nominal wages rose, real wages (adjusted for inflation) struggled to keep pace.
In 2020, the COVID-19 pandemic severely disrupted the regional labour market. Many workers in retail, hospitality, and tourism were furloughed or faced reduced hours, leading to a marked drop in median weekly earnings. Although government support packages mitigated the worst of the impact, real incomes remained fragile, and the subsequent cost-of-living crisis in 2022 further squeezed household budgets.
| Year | Real median weekly earnings in the North East (£) |
|---|---|
| 2013 | 410 |
| 2014 | 405 |
| 2015 | 398 |
| 2016 | 412 |
| 2017 | 420 |
| 2018 | 415 |
| 2019 | 418 |
| 2020 | 385 |
| 2021 | 395 |
| 2022 | 390 |
Using Fig. 1, explain the change in real median weekly earnings in the North East from 2013 to 2022.
