16th April 2014
Today’s official figures from the ONS show average earnings have caught up with the rate of CPI inflation, with both at 1.7%, for the first time since 2010. This is a significant moment given the unprecedented squeeze of recent years and will come as a relief to many workers.
Amid the good news there are remaining areas of concern. Pay growth still lags rising prices if the RPIJ or RPI measures of inflation are used and growth in regular earnings (pay excluding bonuses) is still behind on all measures of inflation. The earnings of Britain’s 4.5 million self-employed workers are not covered by today’s figures.
The positive wage data is also backed with a strong labour market performance –with ONS figures showing employment rising by almost 240,000 in the three months to February, compared to the previous three months.
Resolution Foundation analysis today shows that 61 per cent of this growth in employment was among the self-employed.
The jobs gap – the number of jobs that still need to be created to return to the employment level seen in 2008, has narrowed sharply to 480,000 (for 16+), down from 656,000 in last month’s labour market figures. The jobs gap for those who are 16-64 has fallen from 310,000 to 170,000.
Matthew Whittaker, Chief Economist at the Resolution Foundation, said:
“Today is a significant moment – from now on many workers can expect to feel they are at least breaking even again.
“The good news on wages and employment is genuine, but its effects won’t be felt uniformly across the population just yet. Pay growth still lags inflation on some measures and the growing number of self-employed are not included in these wages figures. Finally, the fact that we may now be emerging from the longest pay squeeze in living memory means there is a huge catch-up on wages that still needs to happen.”
For more information contact:
Warwick Smith (head of communications) 020 3372 2959 or 07443 042722 firstname.lastname@example.org
Natalie Cox (communications officer) 020 3372 2955 or 07983 550337 email@example.com