A new government will struggle to sustain public sector pay freezes, analysis of pay data reveals.
The Labour Research Department study indicates that pay restraint in the private sector is declining.
An uplift in median pay levels and a reduction in the number of pay freezes for the three months to April 2010 suggest that it will be increasingly difficult to impose a pay freeze in the public sector, as all measures of inflation and private sector pay are now rising following the recession.
In the private sector, the median pay increase according to LRD’s database of negotiated agreements was 2% in the three months to April, with pay freezes forming 17% of settlements. One quarter of private sector deals are now being agreed at 3% or more.
The Retail Prices Index inflation measure currently stands at 4.4%.
Lewis Emery, pay and conditions researcher at LRD, said: “While we may not have seen the back of pay freezes just yet, there is likely to be greater pressure on all employers to settle for a positive increase as pay medians begin to rise.
“Public sector unions are already very unhappy about plans to hold down wages. With the rise in inflation, and pressure from comparisons with the private sector, it may be hard for whichever party is in government after the election to keep the lid on public sector pay.”
Consultants suffered a pay freeze in 2010/2011, while juniors received 1%.
Read the full report.
Tags: Pay
