Post-Brexit wage pain

Even as jobs become more plentiful, new figures show that workers’ wage pain is set to continue as inflation bites and the UK’s post-Brexit economy begins to take shape.

Compared to July of last year, wages are down more than ÂŁ1,000 in real terms in the same month this year, which amounts to a 3 per cent drop, according to a new report from Adzuna, a jobs search engine.

As ever, young people have borne the brunt of wage falls, with average advertised salaries for graduates dropping 4.3 per cent last month compared to the same time period last year, from ÂŁ24,682 in July of last year to ÂŁ23,609 now.

Graduates also have fewer options as entry-level job vacancies fell year-on-year from more than 15,000 July last year to 12,838 last month.

“Normally this time of year is exciting for graduates,” said Adzuna co-founder Doug Monro. “They’ve got a range of job choices, endless opportunities and tons of enthusiasm. This year seems slightly different despite there being more high-quality graduates than ever before.

“Companies are cautious about the future due to Brexit and so have less money to offer high starting salaries,” he warned. “It’s also hard to guess how many workers they will need.

Young people now in university have also suffered as the number of part-time vacancies in university towns has dropped.

“You might expect students in big university cities like Manchester and Birmingham to have no problem securing some extra work but with just 1,133 part-time roles on offer in Manchester and 38,590 students at the University of Manchester this year it’s not quite that simple,” Monro noted. “Rising fees are heaping financial pressure on students and so part-time jobs will become an even bigger necessity to some.”

Regional disparities

The report also reflects the pronounced disparities in pay among different cities and regions in the UK. The steepest annual decline in average pay was in the North East, where the average advertised salary dropped to ÂŁ28,551 last month, which was 4 per cent lower than the ÂŁ29,737 average advertised in July 2015.

The Midlands experienced the biggest monthly drop in average pay, while some cities, including Brighton and Winchester, actually experienced a rise in monthly wages.

Adzuno explained that the variations in regions and cities could mean that wages are finally starting to pick up slowly in what the job searched engine company called a ‘potential turnaround’, but Monro explained that it was also the case “that not enough is being done to support certain cities which perhaps are more reliant on struggling sectors.

“Workers in the Midlands, the UK’s manufacturing core, have been feeling the strain for some time.”

The report found also that Belfast is now the most difficult city to find a job, with an average of 4.05 jobseekers for every vacancy, followed by Sunderland with nearly three jobseekers for every opening and Hull, with 2.37.

The report highlighted a trend in the persistent growth of low-paid and contract jobs as employers move away from permanent jobs amid protracted uncertainty.

Monro blamed a series of events that have collectively threatened working people’s living standards.

“After the shock of Brexit, a new prime minister and lower interest rates, rising inflation has now entered the ring,” he explained.

“Not only are advertised salaries falling, but inflation is hitting workers hardest and where it really hurts – their wages. Lower-paid roles are becoming more common as finance and tech companies pull back on hiring.

Troubling figures

A TUC spokesperson argued that the new report contained “very troubling figures.”

“Workers still haven’t seen their wages recover since the financial crisis,” the spokesperson said. “They cannot afford yet another hit to their pay packets.

“The government must step up investment to ensure that working people do not pay the price for Brexit,” they argued. “That means a real industrial strategy, a green light for Heathrow’s third runway, high-speed rail, and a massive programme of house building across the UK.”

Unite assistant general secretary Steve Turner agreed.

“Unite has long argued that any post-Brexit pain will likely be felt most by working people who’ve already experienced an unprecedented drop in the real wages after a generation of austerity,” he said.

“These latest figures add to the growing evidence that wages aren’t going to recover any time soon. And the situation is even worse for those who have historically suffered most in the last few years – young people, for example, and those living in the UK’s industrial heartlands which have been blighted by decades of government neglect.”

“Now is the time to for the government to step in and ensure that working people do not pay the price of the economic uncertainty that Brexit has unleashed,” Turner added.

“The new prime minister should walk the walk and not just talk the talk when she says she supports working people.  This can be accomplished by immediately abandoning the government’s failed austerity programme and adopting an industrial strategy which commits to the sort of mass public investment we need to kick-start an economy that’s now lying dangerously stagnant.”

“With unions leading the way amid a renewed emphasis on sector-level collective bargaining, we can make inroads into a new economic order in which all people at the very least earn a true living wage.”