Recovery? What recovery?

The supposed economic recovery continues to be felt only by those at the top, as a wide-ranging survey of 1,000 employers shows little willingness to grant its workers pay rises.

The survey, conducted by the Chartered Institute of Personnel and Development (CIPD), found that only 20 out of the employers surveyed – 2 per cent – gave new recruits above-inflation pay rises.

For workers who did receive a pay rise, their wages went up on average by a scant 2 per cent in the private sector and an appalling 1 per cent in the public and voluntary sectors. At the same time last year, median pay increases were at a slightly healthier 2.5 per cent, indicating that wages continue to stagnate.

Only 38 per cent of employers have conducted a pay review since the beginning of 2014 – a shockingly low number considering reviews are typically conducted in the first half of the year.

The number of employers who say they plan to freeze worker pay has increased to 10 per cent this summer from 8 per cent in the spring.

CIPD’s findings fly in the face of other business surveys, which have painted a rosier picture of economic recovery, one in which pay rises were expected to surge. The CIPD says rival surveys did not take into account employers who refused to conduct pay reviews. This, the CIPD argues, has skewed other survey data.

 
While the office of national statistics will publish official wage data on Wednesday (August 13), most economic analysts say the data will be inaccurate, since it is skewed by a rise in bonuses from last year following a cut in the top rate of tax to 45p.

Labour has said that the Conservative-led government continues to be complacent as it trumps up a false economic recovery that benefits few and does nothing in the face of the longest decline in real wages in a century.

In response to the survey, Unite assistant general secretary Steve Turner said, “Mindless austerity is forcing down wages but the cost of living is ridiculously out of step with earnings and big business continues to hoard billions. We urge people to stand up against this – join the march on October 18 because it is high time ordinary people got the pay rise they deserve.”