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31 March 2009

Pay deals reveal two faces of recession

The latest figures on pay deals from the Labour Research Department's (LRD) Payline highlight the two faces of recession. A minority in the most vulnerable companies and organisations have had their pay frozen this year but elsewhere pay deals are still being done, although at a lower level.

In the three months to the end of February, the mid-point (median) increase in pay for negotiated deals was 3.3%, down from 3.5% in January. Many of these recorded rises are the result of long-term deals negotiated before the recession. Among newly-negotiated deals over the same period the median was lower, but still holding up at 3%.

The recession is clearly having an effect on negotiated basic pay levels for some. The bottom quarter of newly-negotiated deals (the lower quartile) was 0% - a pay freeze. Media companies (Trinity Mirror, Newsquest, Liverpool Post and Yorkshire Post) and construction-related companies (Ibstock Brick and Kohler Mira kitchens) are among those most affected.

However, with the cost of living still rising on two of the three monthly measures published by the government (RPIX and CPI), there are more pay rises than pay freezes in the latest LRD figures. Examples include rail companies Balfour Beatty (3.70-4.87%) and Hull Trains (?1,000, worth up to 7.41%), Shell oil (5%), medical and pharmaceutical company Sanofi-Aventis (4.25%) and British Gas Services (4.1% but with a freeze on probationary rates for new starters).

"It seems people still feel that the cost of living is going up, despite zero RPI, and expect their pay to rise too unless jobs are under real threat" said Lewis Emery, LRD pay and conditions researcher.

The three-month median figures are published in the March issue of Workplace Report.

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

Notes for Editors

  • 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 membership.
  • 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


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