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07 February 2011

Most union reps pessimistic on pay and job prospects

The squeeze on employees' spending power could prove fatal to government hopes of a private-sector led recovery in the economy, according to a survey of union representatives.

The Labour Research Department survey shows that workplace reps and officials are generally pessimistic about the prospects for the economy and for their own collective bargaining. Only a minority of respondents think that most staff in organisations where they negotiate will receive pay rises to match inflation this year.

Pay expectations in the public sector are predictably bleak but even in the private sector only 28% feel pay is likely to rise at or above the rate of price increases for most workers: Almost two thirds predict that most staff will receive either a below-inflation pay rise (54%), a pay freeze (6%) or pay cut (2%).

Union reps are pessimistic about how the economy will fare in 2011, with a majority thinking it will be weaker. Those in the public sector are the most fearful, but even among those in the private sector only 16% feel the economy will strengthen during the year while 44% think it will weaken.

These concerns are spelt out in practical terms by reps' predictions of staffing levels where their members work, with a massive 59% anticipating that levels will be reduced in 2011. That view is not confined to the public sector, where 80% are expecting job cuts, but is also held by four in 10 private sector reps. Only 16% in the private sector think the workforce will increase.

It is not surprising, therefore, that reps are tending to make job security an even higher priority for collective bargaining than pay this year. Well over half (57%) say it is their top priority compared with 39% citing pay. While this trend is most evident for those in the public sector, where four in five say it is the main priority, job security is also the priority of a third of reps in the private sector (the other two thirds citing pay).

The Labour Research Department (LRD) also reports that, while pay settlements are now rising, the mid-point of deals monitored by its LRD Payline database is still only 2.6%. This is way behind all measures of inflation, with the RPI up to 4.8% and the CPI rising to 3.7% for December 2010.

LRD pay researcher Lewis Emery said: "Pay rises will need to move considerably beyond the current mid-point if employees' spending power is to be maintained. Coupled with widespread fears of job cuts even in the more buoyant sectors of the economy these findings suggest that the coalition cannot expect an easy route out of the economic doldrums."

Notes to editors
  • A total of 188 union workplace contacts and officials took part in the survey, published in the Labour Research Department journal Workplace Report. Just over half (51%) came from the private sector, 45% from the public sector and 3% from the voluntary sector. The survey was carried out in December.

  • For further information on the survey analysis and article please contact Lewis Emery, LRD pay and conditions researcher.

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