Pay awards may have hit a record low in 2009 - according to latest data from Industrial Relations Services (IRS) - but there is a silver lining to these otherwise bleak pay figures: they are significantly outperforming headline inflation (subscription required).
When measured against negative retail prices index (RPI) inflation - the most commonly used inflation measure for pay setters - these unprecedentedly weak pay figures actually compare more favourably to rises in the cost of living than they did a year ago, when the value of higher pay rises was undermined by high inflation.
We noted around this time last year that the vast majority of UK workers were receiving pay awards below the rate of inflation.
In contrast, the latest IRS headline pay award, at 1.3% over the three months to 31 May 2009, is effectively 2.4 percentage points above the current rate of RPI (-1.1%).
At the risk of a contrivance too far, it could even be argued that, given these very specific circumstances, a pay freeze effectively represents an increase in pay when measured against negative RPI.
- Has your organisation recently carried out an annual pay review? If so, and if it has now been settled, please get in touch so that we can add your organisation's pay award to the IRS database.
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