Average weekly earnings are growing at their fastest rate in 11 years, but Zero-Hours Contracts (ZHCs) are back on the rise again, despite Britain’s tight labour market, the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market statistics.
Nominal average weekly earnings grew by 3.9 per cent in the three months to June 2018 – their fastest rate since June 2008 – while real earnings grew by 1.9 per cent.
While welcome, the Foundation expects pay growth to slow in the coming months, falling short of the pre-crisis average growth levels of 4 per cent (nominal) and 2.2 per cent (real).
And the longer-term prospects for pay are being undermined by another fall in productivity. Output per hour of work fell by 0.6 per cent compared to the same period last year– the fourth consecutive quarter in which it has fallen year-on-year.
The UK jobs market continues to perform strongly though, with employment at a record high and unemployment at its lowest in over four decades.
But this tightness has not prevented a rise in the use of ZHCs, which have increased by 15 per cent over the last year.
Laura Gardiner, Research Director at the Resolution Foundation, said:
“The UK labour market looks like a sea of calm amid growing economic uncertainty both here and abroad. Employment remains at a record high, while earnings are growing at their fastest rate since mid-2008.
“The question is how long this calm can be sustained, with the economy contracting and productivity falling for the fourth consecutive quarter. Turning this around has to be a top priority for the new government.
“And while the labour market overall is in rude health, the significant rise in Zero-Hours Contracts shows that job quality remains a concern, particularly for young people.”