Unemployment continues to fall, but workers face pay squeeze

 

Unemployment has fallen to its lowest level in over 40 years, but pay growth is slowing rapidly and is already negative in some parts of the economy.

The Resolution Foundation responded to today’s Office for National Statistics figures that showed employment remained at 74.6% while unemployment fell to 4.7%.

It said that despite the positive employment statistics, there was little sign of stronger pay growth. According to the think tank, real earnings growth fell to 0.8% in the three months to January, compared to two per cent just seven months ago.

It pointed out that analysis following today’s figures suggests pay growth will fall to 0.2% next month before turning negative during the course of 2017.

In addition, it highlighted that earnings are already falling in some sectors including manufacturing, education, professional activities, finance, real estate and mining.

Laura Gardiner, senior policy analyst at the Resolution Foundation, said: “On jobs the UK economy continues to perform well, with employment remaining at a record high and unemployment hitting a 41-year low.

“But this labour market tightening is not feeding through into wage pressure with all the signs now pointing to an end to Britain’s short lived pay recovery. Weak pay rises and rising inflation mean that a fresh squeeze is due later this year, and has already begun for some workers, especially in the public sector.

“The incredibly poor outlook for pay has pushed a return to pre-crash earnings back well into the next parliament, making the 2010s the weakest decade for pay growth since the Napoleonic wars.”

Wednesday, 15 March 2017

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Unemployment continues to fall, but workers face pay squeeze