Pay freezes the norm

Published:  26 August, 2009

LONDON: Research confirms anecdotal evidence from merchants of pay freezes in the industry.

Average pay deals in the UK are running at just 1% after a sharp fall in settlements, with many workers in private firms receiving no rise this year.

An analysis of 46 settlements for the quarter to July by Industrial Relations Services showed that almost half involved a pay freeze.

Sarah Welfare of IRS said: "Pay awards have taken a far greater hit in the current recession than they did in the recessions of the 1980s and 1990s, our data suggests.

"All the evidence suggests that pay awards will remain subdued for the rest of 2009. With rising unemployment, a low minimum wage rise due in October and headline inflation in negative territory, the chances of higher pay rises for employees in the near future will be slim," she said.

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