Proportion of pay freezes continues to fall


Proportion of pay freezes continues to fall

The proportion of wage freezes has continued to fall in the three months to the end of March 2010, according to the latest data on pay awards from

Freezes accounted for 31% of settlements recorded in this period, compared with a figure of 34% in the February quarter. Overall, the IDS measure of pay settlements across the economy (median level) has risen slightly to 1.9%, up from 1.8% in February. The rise was mainly prompted by an increase in settlement levels in private services.


April deals show modest upward trend

Looking at deals with effective dates in April, the proportion of pay freezes is down still further, accounting for a quarter of the 60 pay settlements IDS has recorded so far. This compares with 36% of deals effective from January, which is the other main month for pay-setting.

Although the proportion of pay freezes is falling in the whole economy overall, the number of zero awards is rising in the public sector, with over half of the pay freezes effective in April affecting public sector workers. For example, 115,000 consultants, general practitioners and dental practitioners covered by the NHS Doctors and Dentists Review Body had their pay frozen for 12 months from 1 April 2010.

Summary of key settlement data

For the three months to the end of March 2010, based on 112 settlements covering 313,214 employees in total, the key statistics are these:

  • Whole economy median: 1.9%

  • Whole economy average: 1.6%

  • Whole economy inter-quartile range: 0% to 2.5%

  • Manufacturing and production median: 2%

  • Private services median: 1.3%

A final word

“We are seeing a slow recovery in private sector pay awards. In particular, the proportion of freezes is drifting downwards, in a reversal of trends witnessed at this time last year, when the number of zero awards was rising steadily. However, settlement levels are still lagging behind inflation which means that real-terms wage growth remains weak for most workers. And the picture is even worse in the public sector, where restraint has started to bite hard and, in contrast to the private sector, the proportion of freezes is rising.” - Ken Mulkearn, Editor of IDS Pay Report.

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