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27 January 2009

Pay freezes grip some January settlements while wages overall continue to rise

Pay freezes are the most noticeable new trend in January's settlements posted
to the Labour Research Department (LRD) Payline database. But these are balanced by little movement in the levels of pay settlements overall. The midpoint increase in settlements is still 3.5%.

Out of 73 settlements that have come into effect on or after 1 January 2009, 12 - or one in six - are pay freezes either for the entire 2009 pay round or to be reviewed later in the year.

The number for January alone is 50% higher than the eight pay freezes posted to Payline in the whole of 2008. A majority of the freezes have occurred in the media sector, particularly local papers and books. Others are in manufacturing,
chemicals and finance.

But at the other end of the wage spectrum, 10 (one in seven) deals in January were for increases of 5% or more, while the largest number - just over a quarter (20 or 27%) - fell into the 4%-4.99% bracket.

"Pay freezes are the new element in pay trends but plenty of people are still
getting good increases and overall settlement levels have not dropped off
dramatically," said Lewis Emery, LRD's pay and conditions researcher. "Pay
freezes may be being accepted by unions as a way to preserve jobs, but they
may also reflect employers' desire to drive down costs with the recession as an

In an LRD survey of union reps' bargaining predictions, conducted in December 2008, 9% of union reps predicted or had been told to expect pay freezes for 2009 across both public and private sectors.

However, the survey also found 17% of reps predicting pay rises of higher than
last year, and another 26% expecting similar deals to 2008's pay round.

"The pay trends in January's Payline database would seem to bear out union reps' predictions by showing a broader spread of deals ranging from over 8% to zero", said Emery. "This suggests that the downturn is affecting pay in various
industrial sectors in very different ways."

Payline registers pay and conditions settlements negotiated between unions and employers across all sectors of the economy. It contains around 2,300 agreements, and acts as a barometer for pay trends throughout the year.

For further information about Payline or Workplace Report, contact Rebecca Johnson (Workplace Report editor) or Lewis Emery (Pay researcher).

Notes for Editors
  • LRD surveyed over 700 union reps on their predictions for the effects of
    the current economic situation on bargaining in 2009. Around 10%
    responded in full. The report of the survey "The shape of things to come:
    bargaining in 2009" can be found on p. 15-16 of the January issue of
    Workplace Report. Reps reported on economic factors affecting their
    bargaining choices, and expectations for pay rises, cutbacks and job
  • The full news story on pay freezes appears in the January 2009 issue of Workplace Report, p.4.
  • Workplace Report is LRD's monthly publication for union reps and negotiators. Labour Research Department is an independent organisation founded in 1912 to produce research on behalf of trade unions and the labour movement. More than 1,800 trade union organisations, including 55 national unions, are affiliated to it, representing more than 99% of TUC
  • Payline is LRD's database of negotiated agreements reported to LRD by unions. It includes around 2,000 agreements with information on pay,
    terms and conditions and other aspects of the employment contract. A full
    pay round survey is conducted bi-annually in April and October.
  • Pay settlements are negotiated rises on basic pay, and exclude bonus,
    increment, overtime and other allowances.

Download: Pay Freezes Press Release (Jan 09) (pdf file, 37KB)


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pdf file (37KB)