Latest ONS figures show pay and productivity falling despite strong employment

Today’s latest ONS statistics once again show employment has continued to increase and unemployment has fallen to the UK’s lowest rate since 1975.

However, that positive news is overshadowed by confirmation that real regular pay is now falling, with a 0.2% drop in the last three months, and UK productivity continues to struggle.

We share reactions from the HR World:


Gerwyn Davies, Labour Market Adviser at the CIPD, the professional body for HR and people development said the statistics painted a ‘grim picture for UK living standards’:

“The combination of rising inflation and poor productivity paints a grim picture for UK living standards. As well as hitting UK workers in their pockets, this fall in real regular pay also potentially puts at risk an economic recovery that has been reliant on strong consumer spending. The latest CIPD/The Adecco Group Labour Market Outlook suggests that the pay squeeze will continue for some time, with employers suggesting that their median pay increases will be just 1% for the next twelve months.


“The figures also expose a problem with unfilled vacancies, which now stand at 780,000. This reinforces the need to increase investment in the current workforce, as it is likely that future labour availability will be constrained by Brexit and tighter restrictions on inward migration. The high demand for labour may partly explain why the number of EU nationals in employment has grown sharply in the first quarter of 2017 compared with the second half of 2016.”


Doug Monro, co-founder of Adzuna, warned ‘cash flow could be an issue for many’:

“On the surface the ONS labour market statistics paint the jobs market in a positive light, as the number of people in work increases and the number of unemployed fell. Looking at the wider context of the labour market, temporary inflation rises are continuing to place further strain on household disposable incomes as jobseekers and employees prepare to feel the pinch over the coming months. However, the labour market is sitting tight in the eye of an economic and political storm and it is no secret that as prices continue and wages flatline, cash flow could be an issue for many.


“With the General Election around the corner, the successful party has a tough job ahead to contain the underlying pressures that are contracting wage growth as consumers may eventually begin to see a fall in living standards. From  an employer’s perspective, this may affect employee morale as the stress and strain of stagnating advertised salaries starts to creep in.”


Steve Hill, External Engagement Director at The Open University said:

“The UK’s poor productivity is a matter of national concern and improving productivity lies in employers building skills rather than buying them.


“There is a new opportunity for organisations operating in England to retrain and upskill employees of any age via the apprenticeship levy, but organisations all across the UK should embrace work-based learning to realise the talents of their staff.


“Adult education and training has a role to play in raising productivity, increasing social mobility and enhancing progression into well-paid jobs – there has never been a better time to embrace lifelong learning.” 


Lee Biggins, founder and managing director of CV-Library, was upbeat about full employment, stressing the importance of fair and exciting job opportunities:

“It’s extremely promising to see that the number of people in work has increased, and our own job market data for the first quarter of 2017 found that jobs were up by 15.4% year-on-year and 14.5% quarter-on-quarter.


“Furthermore, we found that applications rose by a staggering 28.8% compared to the last quarter of 2016, and while this is unsurprising given the time of year, it is a positive trend. Clearly, more people are looking for work, as confirmed by the huge fall in unemployment, and it’s important that businesses continue to offer fair and exciting opportunities for all.”


TUC General Secretary Frances O’Grady said it was time to ask every party about their plans to increase wages:

“Today’s fall in real wages risks tipping working people into another living standards crisis. And that poses a major challenge for whoever forms the next government.


“The big question for every party is – what’s your plan to get Britain’s wages rising again?”


“Any party that’s serious about giving Britain a pay rise will have a plan to create well-paid jobs in the towns that need them most. They will have a plan to raise the minimum wage to £10 as soon as possible. And they will have a plan to stop the unfair pay cuts that are making hard-working midwives, firefighters and nurses thousands of pounds worse off.”


Young Women’s Trust chief executive Dr Carole Easton OBE called for more support for young women who face unemployment, stagnating wages and insecure work:

“Today’s figures show that half a million young women are now out of work and full-time education. Those in work face stagnating wages, while the cost of food and other basics is rising. This is making life even harder for thousands of young women – many of whom are already skipping meals and using food banks in a struggle to make ends meet.


“Young women tell us they want to work and be able to live independently, but insecure work, low pay and a lack of jobs are holding them back. It’s not just families that are losing out from this but businesses and the economy too.


“Millions of young women’s votes are at stake in this election. Politicians must commit to improving young people’s prospects – or even more will be driven to food banks and the economy will suffer. Young Women’s Trust is calling on all parties to pledge to invest in jobs and skills for young women, improve support at job centres and end the discrimination that sees young people paid less than their older counterparts for the same work.”

Author: Editor

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