Wages failing to keep pace with inflation

Wages failing to keep pace with inflation.

Levels of pay are not keeping pace with inflation, according to this year’s North West Wages Survey.

The survey shows that, despite record inflation rates, fewer employers are taking inflation into account when setting pay. This has resulted in a lower average increase in overall pay compared with last year.

The Greater Manchester Chamber survey also reveals that payroll bills have increased by an average of 5.7% over the past year, compared with 9.1% in 2007.

Holly Keogh, Assistant Policy Manager at Greater Manchester Chamber, said: “The drop in payroll bills is interesting given the fact that inflation has increased dramatically during the same period. The drop could reflect a stagnating, rather than rising workforce or the effect of a slowing economy.”

The survey records the average wage being paid this year for each type of employment. Bricklayers have seen their hourly pay rate drop by 6.9% compared with last year, possibly reflecting the downturn in the construction industry. However a computer programmer has seen his annual salary increase by 42%.

Ms Keogh said: “Some sectors, such as IT, are still enjoying pay increases, but in general most people’s pay is not keeping pace with inflation. This is probably the result of employers trying to keep their costs down, which will in turn lead to employees having less spending power.”