Pay deals stable in private sector
Pay deals in private firms have remained stable at an average of 2% in recent months but public sector workers face wage freezes, according to a new study.An analysis of 180 company settlements by IDSPay.co.uk showed average rises remained at 2% in the quarter to June compared with the three months to May, but more than one in five deals were worth over 3%, slightly up on the previous period.
In "stark contrast" with private firms, the number of pay freezes in the public sector was rising fast, with half of 30 deals monitored showing no wage increase.
Newly-recorded pay freezes covered 1.4 million council workers and IDS predicted that the trend was likely to increase.
Two thirds of deals in the private sector resulted in a pay rise for workers, with the biggest rises recorded in utility companies.
Long term pay deals were starting to re-emerge after a "dramatic" drop during the recent recession, according to the report.
Ken Mulkearn, editor of the IDS Pay Report, said: "There are renewed signs of life on the remuneration front in the private sector. Long-term deals are making something of a comeback, and pay reviews in hard-hit sectors like autos are resulting in money in employees' pockets once more.
"But the contrast with the public sector is ever-sharpening, with the number of staff covered by pay freezes rising, alongside widespread job cuts."
TUC general secretary Brendan Barber said: "It is good news that private sector workers are seeing improved pay awards, but there is still some way to go before most people's pay catches up with inflation.
"The much lower pay increases in the public sector are now at a level where they are depressing demand and increasing the risk of a double-dip recession."
Long term pay deals were starting to re-emerge after a "dramatic" drop during the recent recession, according to the report.
Ken Mulkearn, editor of the IDS Pay Report, said: "There are renewed signs of life on the remuneration front in the private sector. Long-term deals are making something of a comeback, and pay reviews in hard-hit sectors like autos are resulting in money in employees' pockets once more.
"But the contrast with the public sector is ever-sharpening, with the number of staff covered by pay freezes rising, alongside widespread job cuts."
TUC general secretary Brendan Barber said: "It is good news that private sector workers are seeing improved pay awards, but there is still some way to go before most people's pay catches up with inflation.
"The much lower pay increases in the public sector are now at a level where they are depressing demand and increasing the risk of a double-dip recession."
© 2010 Press Association