Unions have called on the UK Government to introduce measures to tackle the scourge of low-paid employment, as labour market statistics published today by the Office for National Statistics (ONS) show a fall in real-terms earnings.

Latest estimates by the ONS show that average weekly earnings for employees in Great Britain increased between March to May 2017 by 1.8% including bonuses and by 2.0% excluding bonuses, compared to the same period a year ago.

But the same data also reveals that real-terms earnings, adjusted to account for rising inflation, fell by 0.7% including bonuses and by 0.5% excluding bonuses, when compared to a year earlier.

The startling figures overshadow a fall in unemployment and increase in the number of people in work. The unemployment rate has fallen to 4.5%, down from 4.9% for a year earlier and the lowest since 1975, and the employment rate rose to 74.9% – the highest since records began in 1971.

TUC General Secretary Frances O’Grady called on the UK Government to lift the pay freeze on public service workers and for zero-hours contracts to be banned.

She said: “Three months of falling pay is three months too many. The clock is ticking whilst workers wait for the government to act.

“Ministers must set out a plan to get real wages rising across the public and the private sectors. They should start by scrapping the unfair pay restrictions on nurses, midwives and other public sector workers. And the minimum wage must be raised to £10 as quickly as possible.

“Tackling insecurity at work is important for improving pay too. When people don’t feel secure in their job, they are less likely to push for the pay rise they deserve.

“The government should start by accepting the Taylor Review recommendation to give agency workers equal pay. And they should go further and ban zero-hours contracts.”

Tim Roache, GMB General Secretary, said: “The fact wages are dropping like a stone means millions of working people are struggling to make ends meet.

“This isn’t some theoretical debate in Westminster, this is real people going to work every day but still not being able to get by.

“Yesterday, Matthew Taylor called for more quality jobs – well these figures show they just aren’t there.

“The public sector pay cap is causing misery for millions of families, with the people how keep us safe, care for us and teach our kids having thousands cut from their pay in real terms.

“If the Prime Minister wants to do something about living standards then that’s one policy she could drop overnight.

“An economic record that compares to the 1970s is nothing to be proud of.

“With inflation spiking and wages stagnating, it’s no wonder this has become the Tories’ summer of discontent.”

Unite general secretary Len McCluskey warned of a “wage crisis” and accused the Tories of “creating the longest period of falling real terms pay since the Napoleonic wars”.

Mr McCluskey added: “Of course the high numbers in work are a good thing, but there should be no self-congratulatory backslapping from ministers over the employment figures.

“Instead, we need a renewed focus on ending the wage squeeze with ministers straining every sinew to ensure work pays a decent wage in this country. Lifting the self-defeating cap on the pay of millions of public sector workers has to be top of the list.

“We need an economy built on decent, secure well paid jobs. Theresa May’s failure to embrace even the timid Taylor review suggests her government is yet to break any sweat on this.

“That report cannot be the final word on the matter. It is not a government plan for the creation of the decent wealth-creating jobs of tomorrow this country needs, or those that will pay for our public services.

“The dramatic spread of in-work poverty, the almost one in three with no security of work or income and the glaring holes in the Treasury’s bank balance because low wages mean falling contributions has happened on the Tories’ watch.

“Workers across the country desperately need a boost to the minimum wage to £10 an hour, an end to the public sector pay cap and action to ensure we have an economy based on secure, decent jobs.

“Theresa May and her Tory ministers need to wake up to crucial role trade unions play in improving the living standards of working people. Time and again trade unions prove they are the best agents to improve pay and working life.

“It’s time the government stopped treating trade unions as some sort of ‘enemy within’ and started supporting us as we strive to support working people.”