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Tue, 29 September 2020

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UK wages stagnant despite record high employment, new figures show

UK wages stagnant despite record high employment, new figures show
2 min read

Real term wages are still lower than they were before the financial crisis despite record high employment, new figures show.

The UK employment rate now sits at 76.2% - a new record high but only a 0.1% increase from the start of 2019, according to Office for National Statistics (ONS) figures.

Meanwhile, average weekly pay in the year to October 2019 was 4.3% less than the pre-downturn peak of peak of £525 in February 2008, when taking inflation into account.

The modest figures come after the UK narrowly avoided a recession last month, recording the country’s slowest growth in a decade. Vacancies have also fallen yet again, dropping below 800,000 for the first time in two years.

Other positive news includes a record low employment rate for women, as well as youth unemployment falling by 50% over the last decade.

Pay is still increasing in real terms, but this growth has slowed in recent months partly due to economic uncertainty surrounding Brexit, ONS analysis suggests.

Nye Cominetti, economic analyst at the Resolution Foundation, said the rising pay and low unemployment figures would “be welcome news to the new government”.

But, he added: “The UK’s slowing economy has started to hit workers’ pay, reminding us that the labour market cannot be divorced from wider developments. “Remarkably, British workers are reaching the end of the decade with their pay packets stretching no further than they did at the end of the last decade.”

However, Sajid Javid, Chancellor of the Exchequer, was positive about the ONS’s findings.

He said: “There’s talent up and down this country – three quarters of employment growth in the last year has been outside London and the South East. “I’m looking forward to getting Brexit done and unleashing Britain’s potential, levelling up opportunity across the country.”




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