“One-third of UK workers got pay rise of 1% or less last year” [again]

“More than 10 million workers received a pay rise of 1% or less last year, according to official figures that highlight the growing concentration of workers at the bottom of the pay scale.

The Office for National Statistics said almost 32% of Britain’s workforce of 32.5 million people were given an increase that was less than one-third of the inflation rate, which reached 3.1% in November 2017.

Most workers lost out last year, the ONS said, after it found the median gross weekly earnings for full-time employees grew by 2.2%.

Fuelling the debate about low-paid workers, the figures showed employers barely reacted to the inflation spike last year, when they paid employees much the same as in 2016, when inflation was below 2%, and in 2015, when inflation fell to almost zero.

Wages have climbed this year, according to the Bank of England. It estimates the rate of increase has reached 3%, though this is only marginally more than the consumer price index (CPI) measure of inflation, which is 2.4%

The ONS said much of the 1% cap affected the 5.3 million workers in the public sector, many of whom are better educated and higher paid than the average across the workforce. But millions of private sector workers were also affected by wage rises of 1% or less, leading to a greater concentration of workers on the bottom rungs of the pay ladder.

Many were protected by the “national living wage”, which increased by 4.2% on 1 April 2017 from £7.20 to £7.50. Workers on wages above this level, however, were among those to receive either no rises or low ones, leading to clustering around the minimum wage, according to the ONS.

A regional survey found the UK’s worst-affected area was Northern Ireland, with 13.1% of employees earning close to the NLW, compared with 5.9% in London. …”

https://www.theguardian.com/money/2018/nov/02/millions-of-uk-workers-received-pay-rise-of-1-or-less-last-year

2 thoughts on ““One-third of UK workers got pay rise of 1% or less last year” [again]

  1. I suspect that the picture may not be quite as good as a 1% increase.

    As a small business owner we have noticed a reduction in business enquiries since people started to worry about the economic consequences of Brexit, and I am sure that there are many people, especially in the “gig economy” or on zero hour contracts who are getting fewer hours work and are therefore actually taking home less than they did before.

    And of course, we are talking here only about cuts in income over the past year – let us not forget the impact of the previous 8+ years since the financial crash which have seen people getting no pay rise at all for several years in a row, with inflation eating into the buying power of what they do receive. And of course we have seen thousands of people in retail, construction and outsourcing lose their jobs and income due to government inaction.

    Indeed, recent statistics have shown that lower income is not restricted to the lowest part of the ladder – in reality 60% of the population are poorer this year in real terms than they were in 2015 – with the lowest 10% being 10% worse off. When you are already struggling to keep a roof over your head and food on the table, being 10% worse off is not about whether you can afford a luxury or not – it’s about whether you lose your home or have to starve yourself to feed your kids.

    Most of the remaining 40% have only had small real-term increases in income since 2015 of c. 1%. So where has all the economic growth ended up?

    Oddly enough, these same reductions in income don’t seem to have happened for those at the top of the ladder. MPs for example have had pay rises well above inflation, not to mention the well publicised eye watering salary increases and bonuses given to senior executives in several industries, increases which then get combined with reductions in tax rates also given to those on high incomes and to the corporations they own.

    Another statistical fact is that the top 1% of earners in the UK have seen their share of GDP triple since 1979 – which means that the rest of us have had to share a significantly smaller share of the total. If you think that Conservative Party neo-liberalism has left you better off, think again.

    So next time you have to vote in a parliamentary election, you might want to think twice about whether to vote Conservative, a party who for 40 years has been making the already very rich 3x richer at the expense of the rest of us. Perhaps it is time to give a chance to a political party (or parties) who genuinely represent the interests of the electorate rather than the rich elite (the same rich elite who donate to – or as I call it “invest in” – the Conservative Party that serves their interests so well at the expense of ours.

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  2. Official Devon County Council figures showed that on average male full-time workers received a 0% pay rise, i.e. none, in 2017 which meant a 3% pay cut in real terms, with inflation taken into account.

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