The Office for National Statistics have just released figures which show that pay rises over the last quarter are increasing at the fastest rate since 2008.
Pay Rises Accelerating
The figures released by the Office for National Statistics show that for the 3 months to October 2018, pay excluding bonuses had increased by 3.3% compared with a year earlier. This compares to 2.9% for the 3 months to July 2018, and it represents the highest rate of increase in terms of pay rises since November 2008. With inflation at 2.4%, this represents a real terms increase of 0.9%.
Other findings from the report include:-
- Average weekly earnings increased to £495.00 compared with a year earlier. In the private sector, average weekly earnings increased from £471.00 to £488.00. In the public sector, it rose from £514.00 to £528.00.
- Unemployment increased by 20,000 to 1.38 million (4.1% of the working population). However, the number of people employed rose by 79,000 to 32.48 million (a new record total since records began in 1971), and the level of economic inactivity fell by 95,000 to 8.66 million (a fall of 0.2% to 21%). The main reason for the fall in the number of those who are economically inactive was the reduction in the numbers of those who are classified as long term sick by 73,000 to 1.97 million. Nevertheless, there is evidence to suggest that many of those with long term health problems are being compelled to return to the labour market, despite those medical issues, due to benefits cuts and controversial disability reassessments.
- The main reason for an increase in unemployment at the same time as an increase in employment is the continuing rise in the working population, plus the fact that proportionately more older people are remaining in the labour market, and more students are joining it. However, many of the new jobs that have been created over the last 10 years are low paid, insecure, and very often of the gig-economy/zero hours contracts variety. Indeed, around 3 million workers now have jobs that are classified as insecure.
- The number of job vacancies increased by 10,000 to 848,000, a new record
Working Poverty: When Having A Job Is No Longer Enough To Get By
The latest figures from the Office for National Statistics do not however reveal the complete picture. Whilst there are record numbers in employment, the long period that this country spent in austerity with below inflation increases in wages, combined with the insecure and low quality low wage nature of many of the new jobs being created, means that record numbers of those in work are living in Poverty. As Margaret Greenwood, the shadow work and pensions secretary, pointed out: “The reality behind these figures is that the number of people in work in poverty is rising faster than employment. Real wages are still lower than they were 10 years ago.” Indeed, the Joseph Rowntree Foundation (JRF) highlighted in a recent report, that two-thirds of those living in poverty, came from working households where at least one person is working. At the time of the report, the chief executive of the JRF, Campbell Robb, stated: “It’s totally unacceptable that so many working households are still locked in poverty. Families with children are continuing to struggle to make ends meet, and more households are at risk of being pulled in to poverty. Beyond the statistics, poverty restricts people’s choices meaning that families are having to make impossible decisions such as whether to heat their homes or pay their rent. We share a moral responsibility to make sure that everyone has the opportunity to build a better life. The Government must act to right the wrong of in-work poverty. We urge the Government to restore the Work Allowances in Universal Credit to their original level. By doing so, lower earners could keep more of their earnings ensuring they could reach a decent standard of living, benefiting over three million low income working households and protecting 340,000 people from being pushed into poverty by 2020 – 21.”
The richest 10% in the UK own 44% of its wealth, whilst the bottom 50% own less than 10%. This is a gap that is growing ever wider as each year goes by, with the UK ranked as the 5th most unequal country in Europe in terms of wealth. But, what has changed markedly over the last 10 years is that having a job is no longer to the same extent that it used to be, a route out of poverty.