Pay Freezes 'To Continue Into 2010'

Monday 08th February 2010

Pay freezes from last year are likely to extend into 2010 despite rising inflation, as workers and graduates face more tough conditions in the jobs market, according to a new report.

A study of over 2,000 settlements by the Labour Research Department (LRD) highlighted the growing rate of wage freezes despite RPI inflation jumping by 2.4% in the year to December.

It found that pay freezes accounted for a third of all deals in recent months, a proportion higher than at any time during the recession.

Several companies were planning to continue wage freezes into a second year, the LRD report, said adding that union officials are "extremely cautious" over the economic recovery amid weak pay prospects.

Negotiators for trade unions are warning of fewer long-term pay deals, pension deficits, a tougher stance on issues such as performance, and the continuing threat of pay freezes, job losses and cutbacks.

Lewis Emery, LRD's pay and conditions researcher, said: "It is easy to see that pay will not be the sole or even the main bargaining priority in 2010, although it may be too soon to judge the effects of inflation.

"Maintaining jobs and business continuity is a greater concern, both in the private and public sectors, but with inflation at 2.4% pay will not be neglected either."