Real pay set to get worse for many, says IEA labour market expert
19 July 2022
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Monetary Policy
Lifestyle Economics
15 November 2024
Commenting on the latest labour market data from the ONS, Professor Len Shackleton, Editorial and Research Fellow at free market think tank the Institute of Economic Affairs, said:
“Today’s labour market figures show a continuing positive employment picture, with all the main indicators suggesting improvements.
“Levels of unemployment and inactivity are down again, employment is up, and rates as well as levels show further recovery from the lockdown period. There are positive movements in both full-time and part-time jobs, and even in self-employment which was particularly battered by the pandemic. Average hours worked are up. There are employment increases in all age groups, with younger people’s employment among the most marked, given the recovery in sectors such as food and accommodation.
“Although there are variations by region – with London recovering fastest – employment is up and unemployment down across the country as a whole. Vacancies are up again, although the rate of increase is slowing.
“The problem is pay, which while continuing to rise in nominal terms, has fallen quite sharply in real terms in some sectors. As always, however, some other sectors, notably finance and insurance, have achieved real pay increases.
“Real pay for many could get worse with the next set of figures, as today’s data do not fully cover recent increases in energy and petrol prices. Today’s headline falls in real pay will add to the pressure for big pay increases which are driving the industrial disputes in this ‘summer of discontent’.
“But all this is alongside continuing poor levels of productivity. Without improvement in this the economy will struggle to generate sustained increases in real pay, even if the employment picture remains positive.”
ENDS
Notes to editors
Contact: media@iea.org.uk, 07763 365520
IEA spokespeople are available for interview and further comment.
Further IEA reading:
Summertime Blues: Unions, strikes and the law in 2022, by Professor Len Shackleton
“Today’s labour market figures show a continuing positive employment picture, with all the main indicators suggesting improvements.
“Levels of unemployment and inactivity are down again, employment is up, and rates as well as levels show further recovery from the lockdown period. There are positive movements in both full-time and part-time jobs, and even in self-employment which was particularly battered by the pandemic. Average hours worked are up. There are employment increases in all age groups, with younger people’s employment among the most marked, given the recovery in sectors such as food and accommodation.
“Although there are variations by region – with London recovering fastest – employment is up and unemployment down across the country as a whole. Vacancies are up again, although the rate of increase is slowing.
“The problem is pay, which while continuing to rise in nominal terms, has fallen quite sharply in real terms in some sectors. As always, however, some other sectors, notably finance and insurance, have achieved real pay increases.
“Real pay for many could get worse with the next set of figures, as today’s data do not fully cover recent increases in energy and petrol prices. Today’s headline falls in real pay will add to the pressure for big pay increases which are driving the industrial disputes in this ‘summer of discontent’.
“But all this is alongside continuing poor levels of productivity. Without improvement in this the economy will struggle to generate sustained increases in real pay, even if the employment picture remains positive.”
ENDS
Notes to editors
Contact: media@iea.org.uk, 07763 365520
IEA spokespeople are available for interview and further comment.
Further IEA reading:
Summertime Blues: Unions, strikes and the law in 2022, by Professor Len Shackleton
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