Real wages falling in 40 per cent of the economy despite further falls in unemployment
Around 40 per cent of the workforce are in sectors where pay is falling in real terms, the Resolution Foundation said today (Wednesday) in response to the latest ONS labour market figures.
Real pay growth fell to 0.1 per cent in the three months to February. The Foundation notes that pay is already falling in nine sectors of the economy, including accommodation and food services, transport, finance and the public sector. Together these sectors for account for 40 per cent of the workforce.
The troubling picture on pay has come despite another good performance on jobs, with fast growth in hours worked, employment remaining at a record high and unemployment falling by 45,000.
Stephen Clarke, Economic Analyst at the Resolution Foundation, said:
“Britain’s brief pay recovery has come to an end. Well over a third of the workforce are experiencing shrinking pay packets according to the latest figures, in sectors ranging from accommodation to finance and the public sector. Many more will join them in the coming months as inflation continues to rise, with pay across the economy as a whole set to have fallen in the first three months of 2017.
“While the National Living Wage is protecting the lowest earners from this squeeze, boosting wages across the rest of the economy is the big living standards challenge of this parliament.
“The bad news on pay has come despite another good performance on jobs. The record employment rate has barely changed in the last year but big shifts are still taking place, both in terms of the type of work being done – with a big growth in full time work – and the people doing those jobs, as the number of migrant workers starts to fall.”
Sectors of the economy where real pay fell in the three months to February
|Accommodation and Food Service Activities||-0.5%|
|Financial & Insurance Activities||-1.0%|
|Education (Public Sector)||-1.1%|
|Transport and Storage||-1.3%|
|Real Estate Activities||-1.7%|
|Health and Social Work (Public Sector)||-1.8%|
|Mining and Quarrying||-2.2%|
|Professional, Scientific & Technical Activities||-2.6%|