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Half of British staff had real-terms pay lower in 2020

staff wages


Half of British staff had a real-terms pay lower within the 12 months to autumn 2020, regardless of official figures displaying the quickest earnings development in virtually 20 years, analysis by the Decision Basis suggests.

The thinktank mentioned official figures on common weekly earnings had been “vastly disrupted” by the big variety of staff furloughed, and that the headline charges had been “too good to be true”.

Knowledge displaying common weekly earnings development of 4.5% in late 2020 – its highest degree since 2002 – didn’t replicate how pay packets had modified, it mentioned, and was distorted by adjustments within the make-up of the workforce, with many in low-paid work dropping jobs in the course of the pandemic.

The inspiration mentioned its analysis indicated that the median annual pay rise was 0.6% final autumn, which as soon as inflation was taken into consideration meant half of staff had skilled a 0.2% pay lower over 12 months.

The median pay rise did enhance, rising to 1.8% within the closing quarter of 2020, however this was nonetheless the second lowest rise since mid-2013, and value simply 1% after inflation in line with the examine.

The analysis discovered sharp falls in pay development for younger staff, and mentioned this was notably regarding because it may harm their earnings prospects for years to return.

Hannah Slaughter of the Decision Basis mentioned: “The economic system skilled its largest recession in over 300 years final 12 months, with a 3rd of personal sector staff placed on furlough at its peak, and but considerably implausibly pay development reached its highest degree in virtually 20 years.

“Sadly, the story of bumper pay packets from official headline knowledge is simply too good to be true. In actuality, half of all staff skilled a real-terms pay lower final autumn, with pay development deteriorating most amongst those that have been hit hardest by the pandemic – the younger, the low-paid and people working in social sectors like hospitality.”

Amongst 18- to 24-year-olds annual pay development fell from 12.3% in 2019 to six% in 2020, the researchers mentioned, whereas for 25- to 34-year-olds the drop was from 4.9% to 1.4%. On prime of this younger staff had been extra more likely to have been affected by furlough and job losses, they added.



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