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Sustainable Economy > Published by Tony Burke, November 23rd 2011 at 12:01 am

Pay increases by just 2.3 per cent in the last three months

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Tony Burke is the Assistant General Secretary of Unite

Pay freezes and below inflation pay increases are driving down consumer demand which could lead to a double dip recession – just at the time when the economy needs boosting.

Latest figures from IDSPay.co.uk show that pay increases for the whole of the economy in the three months to the end of October 2011 is 2.3 per cent – down from 2.4 per cent average increase recorded the previous month.

Lower pay awards in the services sector have contributed to the fall in the average settlement figures. Two thirds of the sectors surveyed are in low paid areas such as care services, fast food, leisure, hospitality and retail.

October is seen as a key month in the lower-paying sectors as it coincides with the latest increase in the national minimum wage, which apply in many of these sectors.

In manufacturing average pay has risen to 3.1 per cent, up from 3 per cent in the three months to September 2011. 64 per cent of pay awards in the manufacturing sector are at 3 per cent or above.

Some of the higher awards in the sector have been linked to RPI inflation as part of two year pay deals.

Sub-inflation pay deals in the services and manufacturing sectors are dampening demand even further as hard hit families try to keep up with rocketing food and energy bills.

Al this bodes badly for the coalition government. At a loss as what to do, with no Plan B to revive the economy, last weeks poor growth figures, a flat lining economy, low consumer confidence coupled with sub inflation pay deals mean that a potential double dip recession could be looming.

IDS.co.uk summary of key settlement data
For the three months to the end of October 2011, based on 73 settlements covering 2,247,916 employees in total
Whole economy
Median 2.3%
Average 2.2%
Weighted average (by employee nos) 1.6%
Interquartile range 1.8 to 2.9%
Median by sector
Private sector 2.5%
–Manufacturing & production 3.1%
–Private services 2.4%
Public sector 0.0%

See also:

• Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd 2011

• ‘Workers are children, and if you don’t like high pay, move to Cuba’ – Alex Hern, November 22nd 2011

• Inflation is worse for the worst off – Alex Hern, November 6th 2011

• Will the government drop bankers’ pay legislation? – Zoe Gannon, November 16th 2010

• Public unaware of just how much those at the very top are paid – Zoe Gannon, November 9th 2010

  • http://twitter.com/politicalplanet/status/139146226628182016 Political Planet

    Pay increases by just 2.3 per cent in the last three months: Tony Burke runs over the numbers for pay inflation … http://t.co/f4MVk2rO

  • http://twitter.com/extraditiongame/status/139171308381536257 Extradition Game

    RT @leftfootfwd: Pay increases by just 2.3 per cent in the last three months, writes @TonyBurke2010: http://t.co/WISCsVwd #NewsClub

  • Anonymous

    It’s Labour’s legacy. Profiligate spending has lead to a huge debt, Bernie Maddoff’ed off the books.

    Now, there are going to be massive cuts. So the public is going to get the Tories small government, combined with LibLab’s large taxes.

  • Anonymous

    Next thing. Key in minimum wage into a tax calculator. You get an employment related tax bill (income tax and national insurance) of 2.5K.

    The biggest cost for the poor is government.

    The biggest thing that the government can do for the poor is to stop taxing them.

  • Mark Stevo

    Chris’s comments hit the mark. The fundamental mistake is to assume that the price the government paid in 2007 is in anyway representative of the current value. Cormac claims that the asset was sold for les than it was worth – only a former banker could ignore market price indications and continue to value an asset at cost – is it any wonder you fools got the country into this mess?

  • http://twitter.com/rowllypowlly/status/139278293030551552 Rowland Paul Hill

    Pay increases by just 2.3 per cent in the last three months http://t.co/MIHhwImg Bankers & fatcats are get 50%: everyone else a pay cut!

  • http://twitter.com/strongerunions/status/139283173744975873 Stronger Unions

    RT for those in bed by midnight: Pay increased by just 2.3 per cent in the last three months, writes @TonyBurke2010: http://t.co/1I0BAj62

  • http://twitter.com/andy_notman/status/139297239486054400 Andrew Notman

    RT for those in bed by midnight: Pay increased by just 2.3 per cent in the last three months, writes @TonyBurke2010: http://t.co/1I0BAj62

  • http://twitter.com/occupyexeter/status/139322453154463744 Occupy Exeter

    Pay increases by only 2.3% over last 3 months http://t.co/niavU5o3 #pay #unite #servicesector

  • http://twitter.com/toooldforpe/status/139440160780726275 Jonathan Burton

    RT for those in bed by midnight: Pay increased by just 2.3 per cent in the last three months, writes @TonyBurke2010: http://t.co/1I0BAj62

  • http://twitter.com/Newsbot9 Newsbot9

    Oh yes, boosting the employer’s profitability by 2.5K each will do SO much to help! Employers are NOT going to pass it on, especially since of course the tax threshold would have to shrink to accommodate this.

    Plus, of course, people then are not paying tax, leaving you free to attack them as freeloaders and remove many of their rights. And of course services for the poor will have to be withdrawn to pay for the tax cut…

  • http://twitter.com/Newsbot9 Newsbot9

    Nope, it’s purely Conservative. America has more debt, and is doing better. This is a pure policy-of-choice, designed to hurt the poor.

  • http://twitter.com/unitemanufactur/status/139733333448994816 Unite Manufacturing

    Leftfootfwd Left Foot Forward: Pay increased by just 2.3 per cent in the last three months
    http://t.co/a5jlqIng

  • http://www.leftfootforward.org/2011/11/new-video-from-the-fair-pay-network-makes-the-case-for-a-living-wage/ New video from the fair pay network makes the case for a living wage | Left Foot Forward

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