From the TUC

Most pay deals aren’t freezes – which part of that is hard to understand?

30 Sep 2010, by in Economics, Labour market

For the past two years we have been pointing out that most workers have not had their pay frozen. Where the alternatives really have been pay freezes or redundancies, workers and their unions have agreed to go without a pay increase, but this has always been a minority experience – thank goodness. The latest figures from Incomes Data Services confirm this – just one pay deal in six is a freeze.   

Ever since the start of the recession, most workers have still won small pay increases. What is true is that freezes have been more common and most workers have had below-inflation increases, so our standard of living has fallen in real terms.

Employer organisations and the newspapers have blown this up into the norm and it has been very difficult to get a hearing for a reality that only needed five minutes with the data to confirm.

Of course, bosses have an obvious interest in persuading us all that no-one else is getting a pay increase. For the media, the story has been slightly different – a belief that everyone else was suffering a freeze heightened the contrast with public sector workers who weren’t. Today, when public sector workers face redundancies and even lower pay increases thsan the rest of us, the myth of universal freezes is used to justify what is happening.

In February, Alastair Hatchett from IDS wrote an excellent guest post for us on “The Use and Abuse of Earnings Data“, pointing out that, in 2009:

around one-third of companies had pay freezes – centred on manufacturing, construction and road and air transport. Elsewhere, in energy, finance, retailing and pharmaceutical there were rises for most people and the most common level of increase was around 2%.

Today’s report from IDS confirms this. Half of all companies didn’t freeze pay in either 2009 or 2010 – “pay freezes were never as widespread as initially portrayed.”

Finally, one newspaper seems to have noticed, so hats off to the Daily Express, which reports it straight:

PAY rises are more common than thought with workers continuing to receive increases despite harsh economic conditions …

But hats straight back on again for the Telegraph, which reported the same news with the headline

Pay freezes won’t thaw ‘for two years’

Their only reference to the proportion of employers freezing pay is to the 7 per cent freezing in both 2009 and 2010. Yes pay rises are low – we are in a recession, after all – but this year, once again, most workers will not have their pay frozen.

PS – congratulations to the campaigners from unions and London Citizens who have persuaded University College London to pay the living wage to its lowest-paid workers.

One Response to Most pay deals aren’t freezes – which part of that is hard to understand?

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    Sep 30th 2010, 11:54 am

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