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Average weekly earnings growth across much of the private sector is running at close to 2 per cent. There are two exceptions to this. One is the lower paying sector of wholesale, retail, hotels and restaurants where pay growth is 2.9 per cent and the other is construction where pay growth is close to zero. Meanwhile, earnings growth in the public sector is around 1.4 per cent. More
Regular earnings growth across much of the private sector is running at around 2 per cent. There are two exceptions to this. One is in the lower paid sector of wholesale, retail, hotels and restaurants where regular pay growth is 2.7 per cent and the other is construction where pay growth has stalled at 0.1 per cent. Meanwhile pay growth in the public sector is around 1.5 per cent.
The latest Average Weekly Earnings figures from the ONS, published on 14 November, actually show that total earnings in the private sector rose by 1.8 per cent in the year to September 2012,while total earnings growth in the public sector (excluding the nationalised banks) was 2.3 per cent.
Unfortunately these figures are distorted by the re-classification in April this year of 196,000 teaching and support staff in FE and sixth form colleges from the public sector to the private sector. Two months ago the ONS explained that the consequence of the re-classification was to push up average earnings in the public sector by as much as 0.8 per cent. The average pay of these groups was clearly below the average of the rest of the public sector and removing them has boosted the average of the remainder. In addition the re-classification has had a downward impact on the private sector of 0.2 per cent. This impact was diluted as the private sector is four times the size of the public sector.
As the ONS does not currently produce earnings figures excluding the impact of the re-classification, IDS has estimated what might be considered to be the actual trends in earnings growth as opposed to the distorted figures from the ONS. This shows private sector earnings running at around 2 per cent and public sector earnings growth of 1.5 per cent.
A further point to make is that the Average Weekly Earnings series was designed to be sensitive to changes in workforce composition. This has meant that the large scale growth of part-time work since 2007 (+713,000 jobs) and the fall in full time jobs (-399,000) over the same period has lowered the average level of pay in much of the private sector. Simultaneously, outsourcing of lower paid jobs from the public sector to the private sector and redundancies among support staff in the public sector have combined to raise the average of those who remain in public sector employment.
You could easily be misled at the moment into thinking that public sector pay is rising quite a bit faster than private sector pay because, on the face of it, that is what the ONS data shows. But the fact that the data appears to stand reality on its head is a test for the fainthearted. More
The latest picture on pay from IDSPay.co.uk shows private sector awards standing at 3 per cent in the second quarter of 2012, while the median for the public sector remains at zero. The median increase for the whole economy, combining the private and public sectors is 2.5 per cent. Read the rest of this entry »
The May 2012 earnings figures published today once more give an impression of weak pay growth, with the whole economy figure at 1.5 per cent. Lower bonuses in 2012 than in 2011 across most parts of the private sector have brought down the rate of growth in total earnings. This picture is especially true of the finance and business services sector, which had much lower bonuses in May, producing total pay growth of 1.4 per cent, in contrast to 2.7 per cent on the regular pay measure which excludes bonuses. More
The Retail Prices Index (RPI) measure of inflation dropped back to 2.8 per cent in June 2012, down from 3.1 per cent in May. This annual rate of increase is the lowest since December 2009. The largest downward pressures came from lower prices from petrol and diesel as oil prices weakened as a result of world-wide economic weakness. There were also lower prices for clothing and footwear. There were some upward pressures from higher prices for leisure goods and housing. More
Most coverage of the Average Weekly Earnings (AWE) figures released on 20 June was about the weakness of earnings growth and the impact of this on consumer spending. While earnings growth is not as strong as it might be, in reality, much of the weakness is caused by lower bonus payments, particularly in finance. The figures showed private sector earnings growth at 1.3 per cent in contrast to public sector earning growth of 0.8 per cent. More