It's grim up North... in the Pay Freeze Capital

Finding the summer a trifle chilly? That'll be the pay freeze. A new survey published today says that many employees haven't seen a pay rise in six months.

by MT Staff
Last Updated: 19 Aug 2013
And you know what? If you haven’t had one by now, you’ll probably not be getting one as the busiest time for pay awards in the private sector is between January and May.

Overall half of employees (58%) have seen their pay stall since the beginning of this year and 6% have had their pay cut, as the cost of living goes up, according to a CIPD survey of more than 2,000 people.

And if you are living up North, then you’ll definitely be experiencing the bite as the North West is crowned, wait for it, the ‘pay freeze capital of the UK’, with three quarters of workers getting nothing extra.

The latest statistics show that public sector austerity measures are beginning to take effect, as these workers will typically endure the most pay freezes, with 77% of employees not getting rises, compared to only 52% and 55% in the private and voluntary sector.   
Expect lots of angry unions leaders on the box today putting pressure on the Chancellor George Osborne, who, in his emergency budget in June 2010, imposed a two year pay freeze on public sector workers, but promised that those earning £21,000 or less would receive a flat pay increase of £250 in each of the years.

But the good news is that 28% of workers have received a pay rise. By age, it looks 25 to 34 year olds are most likely to have received a pay rise (31%), while those aged 55 and over are the least likely (23%) to have had one. It isn’t altogether unsurprising as a younger workforce is much cheaper than an ageing one.

However, the fact that some employees have seen a rise is very good news, especially considering how hard it has been on businesses, with investor confidence being eroded by Eurozone instability and US debt issues. The CBI has said this week that the economy will continue to grow at a sluggish rate in 2011 and pick up modestly in 2012, a GDP growth of 2.2% is expected next year.

The lucky private sector employees who have seen their pay go up, according to the survey, tend to be working in finance (46%) and manufacturing (48%), which is probably the result of several lucrative manufacturing sector deals. The CIPD also reckons that salary increases can be linked to the size of the employer, with those working for smaller employer least likely to get a rise.

Unsurprisingly, in these penny pinching times that we live in people aren’t splashing out on hotels and eating out in restaurants - which explains why employees in such establishments are the least likely to see their pay rise.  

It gets worse. Inflation is expected to be higher in the autumn and into next year than previously predicted, mainly as a result of increases in utility prices which are due to take effect later this year.

But there's a glimmer a of light for those working in retail, catering and hotel sectors, who might see a small pay rise in October thanks to an increase in the national minimum wage from £5.93 to £6.08 for workers aged 21 and over.

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