From the TUC

Average Weekly Earnings: zero growth just around the corner

27 Jan 2013, by in Labour market

This month’s employment statistics revealed a danger for pay increases that hasn’t had enough attention: unless average weekly earnings start rising soon, the rate of annual increases is going to fall to very near zero.

Here’s the figures for the last twenty months:

% change year-on-year

Average weekly pay (£)

Single month

3 month average

Apr 11

460

2.5

2.1

May 11

461

2.5

2.5

Jun 11

465

3.3

2.8

Jul 11

464

3.0

2.9

Aug 11

462

2.1

2.8

Sep 11

463

1.9

2.3

Oct 11

465

2.2

2.1

Nov 11

466

2.2

2.1

Dec 11

465

1.9

2.1

Jan 12

464

0.1

1.4

Feb 12

462

0.8

0.9

Mar 12

465

1.0

0.6

Apr 12

471

2.3

1.4

May 12

469

1.8

1.7

Jun 12

471

1.3

1.8

Jul 12

471

1.5

1.6

Aug 12

473

2.3

1.7

Sep 12

471

1.8

1.8

Oct 12

471

1.3

1.8

Nov 12

472

1.3

1.5

Most comments have focused on the annual rate of increase. With good reason: it’s well below inflation and headed in the wrong direction.

But look at the cash value: since last April it has hardly budged. If that remains the case, the ‘single month’ figure for annual earnings increases will fall to zero this April (appearing in the figures out in June) and the ‘3 month’ figure will follow it two months later.

The implications for pay negotiators, facing employers claiming that no pay rise is the ‘new normal’ will be significant. And there will be knock-on effects for the debate about benefits uprating.

What can unions do to win real terms pay increases? This is the focus of this year’s TUC-IDS Pay Bargaining Forum at Congress House on 6 March. Speakers will address the different dimensions of this problem, with plenty of time for questions from delegates. Incomes Data Services are organising registration for this event through a dedicated website – book now to avoid disappointment!

TUC