PAY DATA
Average earnings growth for most employees remains positive
Despite reports of widespread pay freezes, an analysis by Incomes Data Services of the latest official earnings figures shows that almost all industrial sectors had positive earnings growth in the year to February 2009.
According to IDS, what was exceptional was the “drop back” in bonuses in the finance sector, a year-on-year fall of -28.9%, which was sufficiently enormous to push the whole economy figure into negative territory.
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When last month’s average earnings figures were published they showed that earnings in the year to February 2009 had dropped to -2%. But this was on the measure that includes bonuses. On the measure that excludes bonuses, which is known as regular pay, the rate of growth in average earnings was +3%.
At the time (mid-April), a number of commentators leapt to the conclusion that the whole-economy figure dropping to -2% reflected widespread pay freezes and even pay cuts across huge parts of the economy. “This was not the case,” says IDS.
A final word
“At a time when bonus earnings are either volatile or non-existent, the earnings trend should be more focussed on regular pay in order to understand why, for example, consumer spending has not fallen back as much as some economists thought. It is not the case that everyone in the economy has had pay cuts year-on-year of 2% as some have said. In fact regular earnings pay across the economy has risen by 3% in the year to February, consistent with IDS research findings on pay movements over the year.” - Incomes Data Services.
Want to know more?
Title: “Average earnings in recession”, IDS Pay Report 1025, May 2009.
Availability: This fortnightly journal is available on a subscription basis; tel: 020 7429 6800 or order online at www.incomesdata.co.uk/Catalogue/ProductDetails.aspx?recordid=3719&productid=183025.
Incomes Data Services is the “leading UK information and research service on employment issues, providing a range of publications for employers, trade unions, government departments and other agencies”. For more information visit www.incomesdata.co.uk.