You are here: Home - Household Bills - News -

Jobless numbers down but paltry wage growth recorded

0
Written by: Paloma Kubiak
16/08/2017
Employment numbers continue to rise but official statistics reveal average weekly earnings for employees actually fell in Q2 2017, compared with a year earlier.

The employment rate for the period was 75.1%, the highest since comparable records began in 1971, according to the Office for National Statistics (ONS).

There were 32.07 million people in work during April to June 2017, 125,000 more than the preceding three months and 338,000 more than recorded in the previous year.

The ONS notes there were 883,000 people employed on ‘zero-hours contracts’ as their main job, down 20,000 from a year earlier.

Unemployment over the three months was 4.4% down from 4.9% recorded a year earlier, with a total of 1.48 million people not in work. This level is the lowest since 1975 and is 57,000 fewer than for the three months to March 2017 and 157,000 fewer than for a year earlier.

While the labour market data shows positive signs, average weekly earnings for employees in real terms (adjusted for inflation) fell by 0.5%, both including and excluding bonuses, compared with a year earlier.

Where the figures aren’t adjusted for inflation, employees’ wages increased 2.1% (including and excluding bonuses).

The average total pay for employees was £506 a week.

‘Wage growth is the missing piece of the puzzle’

Maike Currie, investment director for personal investing at Fidelity International, said while wage growth has come in slightly better than expected at 2.1%, inflation is still outpacing earnings so “in the post financial crisis world, wage growth continues to be the missing piece of the puzzle”.

She said: “For the past ten years our earnings have flatlined. This could be down to automation, more people working part-time and the growing cohort of self-employed people with limited earning power, such as Uber and Deliveroo drivers in the so-called ‘gig economy’.

“Unfortunately, the outlook doesn’t look much brighter for Britain’s workers. The latest report from Chartered Institute of Personnel and Development says employers are predicting an average of 1% increase in wages in the next year, while the Bank of England has pointed out that uncertainty over the economic outlook may be affecting companies’ willingness to raise pay – it expects regular pay growth to remain subdued for the rest of 2017.

“Paltry wage growth coupled with stubbornly high inflation, means our earnings continue to lag price rises. As each month rolls by UK households are getting progressively poorer. This means our savings and investments need to work even harder. Be careful of leaving your money languishing in cash. It may be a safer option than the stock market but with lower-for-longer interest rates, it’s likely you’ll be losing out over the long term.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week