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BonusesEmployee relationsLatest NewsEconomics, government & businessFlexible pay

Pay falls by nearly six per cent in a year

by Helen Gilbert 30 Apr 2009
by Helen Gilbert 30 Apr 2009

Pay has plummeted nearly six per cent in the past year – the sharpest fall since the Office for National Statistics began collecting data in 2001.

Average weekly earnings fell by 5.8% in February to £459.10 per week compared with the same period last year, latest figures show.

The drop also follows a 1.9 per cent fall in January.

Private sector industries were hit particularly hard with earnings down 7.7% on the year. However, public sector workers have seen their weekly pay packet rise by 3.2 per cent over the past 12 months.

Elsewhere, a separate study by manufacturers’ organisation EEF found manufacturing pay settlements have continued to fall to a historically low level in response to the economic squeeze.

EEF’s pay data for the three months to the end of March shows that the average level of pay settlements has fallen to 1.6%, down from 1.7% for the three months to the end of February -the lowest figure reported since EEF’s survey began in 1987.

The number of firms freezing pay continued to rise to nearly 45% of all reported settlements in the same three month period -the highest level since the survey began.

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The April 2009 Pay Bulletin contains information on 407 settlements covering 68,457 employees.

David Yeandle, EEF head of employment policy said: “This continued squeeze on pay demonstrates very starkly not just the severe impact that the economic downturn is having on manufacturers, but the effort companies, employees and their representatives are making to avoid redundancies.”

Helen Gilbert

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