Average earnings are still £13 a week down a decade ago, an economic think tank has reported.

Just over two million more people have found work since the financial crash of 2008, with more than a million of those in the poorest third of households, the research by the Resolution Foundation showed.

However, with 800,000 workers currently on zero-hours contracts, job insecurity is still “widespread” and real average earnings are still £13 a week less than a decade ago, it said.

Resolution Foundation senior economic analyst Stephen Clarke said the higher employment rates were “a much-needed bright spark amidst the gloom of the pay squeeze”.

Resolution Foundation analysis of average weekly earnings
Resolution Foundation analysis of average weekly earnings (Resolution Foundation)

He said: “Lower income families have accounted for the majority of Britain’s jobs growth, showing that pushing for full employment can boost living standards.

“But while employment is at a record high, Britain is still some way off full employment and too much work remains low paid and insecure.

“Steps to provide advance notice of shifts and a right to a regular contract for those working regular hours on a zero hour contract would also help those in work who have precious little job security.”

The next step was targeted support for disadvantaged groups, said Mr Clarke, who added that childcare support and working tax credits had driven a sharp increase in single parent employment, up from 51% in 2003 to 67% last year.

A new policy to boost employment for people with disabilities or ill health could see a million more people in work, said Mr Clarke.

“This would make the single biggest contribution to achieving full employment, and boost living standards for over a million families,” he said.

“Policies to achieve this could include a new right to return to work after a period of ill-health.

“With fewer than half of people with a disability or ill-health currently in work, targeted support for these groups holds the key to achieving further employment progress.”

Labour shadow chancellor John McDonnell blamed “the disastrous Tory austerity agenda” for the pay squeeze.

Labour Alternative Models of Ownership conference
Shadow Chancellor John McDonnell (Yui Mok/PA)

He said: “These figures show the disastrous impact of nearly a decade of austerity on earnings, with workers in the UK losing out under Tory rule.

“The findings are a stark example of how brutal Tory pay restraint and austerity has led to a crisis in living standards for families.”

TUC general secretary Frances O’Grady accused the Government of turning a blind eye to stagnating wages.

“It’s taking wages longer to recover from this crash than it did after the Great Depression,” she said.

“The Government is turning a blind eye to Britain’s living standards crisis.

“Ministers must get wages rising faster now.”

TUC Conference 2017
TUC General Secretary Frances O’Grady (Andrew Matthews/PA)

A Government spokesman said work was already ongoing to help workers in zero hours jobs request contracts as part of its Good Work plan.

He said: “We have more people in work than ever before, and the national living wage has helped to deliver the fastest earnings boost for the lowest paid in 20 years.

“Through our Good Work plan, we are going further to give millions of workers major new rights and protections, including increased financial security for workers on flexible contracts with a new right to request a more stable contract.”