Prices have risen faster than wages in almost all industries, apart from those who work in professional or scientific roles, according to analysis of official statistics.
The Office for National Statistics found that growth in pay excluding bonuses in the professional and scientific industry, which includes workers in legal services, management, engineering and scientific research jobs, has sat above inflation since November 2018 and has kept pace with price rises over the past year.
The professional and scientific industry has been the only one where regular wage growth has remained higher than inflation throughout 2022; sitting at 10.1% in July to September 2022. Inflation including housing costs (CPIH) rose by 8.8% in the 12 months to September 2022.
The ONS said record vacancies are potentially a reason why wages remained competitive in these roles. Four of the five industries where wage growth stayed above inflation in early 2022 (professional and scientific, information and communication, retail and finance), also had vacancy rates in June 2022 that were 1.5 or more percentage points higher than a year before.
The public sector saw the lowest rate of wage growth, at 2.2% in July to September 2022. In the private sector, growth was 6.6%.
Industries with more public sector jobs, such as education and public administration, have seen some of the lowest pay growth in 2022, along with arts and recreation, mining, and power and water.
Inflation and wage growth
Many employers were using bonuses to top-up pay. This was particularly the case in the finance sector at the end of 2021, where total pay growth rose steeply to 15.9% in October to December. This is the highest rate since the cap on bankers’ bonuses was introduced in the UK in 2013.
Brian Gegg, a partner at law firm BDB Pitmans, uged employers to consider whether bonus payments were affordable.
“The various global and UK-based crisis events that are driving inflation at present are external matters largely out of the control of employers. Yet employees are seeing higher personal and home costs everywhere they look and understandably seek higher wages to help them stand still,” he said
“In practice employers have no legal duty to raise pay to accommodate inflation rises, yet those who make some accommodation are more likely to keep and attract staff.
“It is important to note that the ONS statistics deal largely with wages, as opposed to other benefits. Many employers are focusing on being creative in improving those wider benefits at the moment to strengthen staff engagement and loyalty.”