From the TUC

Pay bargaining in an era of austerity

09 Jan 2011, by in Economics

Incomes Data Services’ latest analysis of pay deals suggests that pay increases will probably be higher than last year but still well behind the rate of inflation. In the three months to the end of November, the median pay settlement rose a little, from 2 to 2.2 per cent and a majority of rises were between 2 and 3 per cent. IDS’s analysis of agreements in January found that this may be rising, “with 3 per cent emerging as a key figure for decision-makers and union negotiators” but still well behind inflation – the latest figure for the Retail Prices Index is 4.7 per cent.

Although private sector increases will be lower than inflation, they will still be well ahead of the public sector, according to IDS. Median pay increases were 0.75 per cent in the public sector last year, compared with 2 per cent in the private sector. What is worse, the number of public sector pay freezes is already rising and the government’s policy of a freeze for everyone earning more than £21,000 will spread the pain even wider.

What can unions do about this? Winning real increases in these circumstances is a new task for some union negotiators, but there are still opportunities – in organisations with continuing skills gaps, for instance.

This is a vital economic task – one reason for the continuing jobs stagnation is the low level of domestic demand, partly down to wages that are losing their value in real terms. That is why the TUC the TUC and IDS are holding a conference on Pay Bargaining in an Era of Austerity, looking at just these issues. The conference will be on 15 February at Congress House, and the speakers will include Alastair Hatchett from IDS, Heather Wakefield from UNISON and Kay Carberry from the TUC; Gail Cartmail from UNITE will chair the day.

You can register here.

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