💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

As workers strike, UK public sector pay hits 19-year low in real terms

Published 12/13/2022, 10:12 AM
Updated 12/13/2022, 11:22 AM
© Reuters. A traveller stands in front of a closed gate, as rail workers strike over pay and terms, at Blackfriars station in London, Britain December 13, 2022. REUTERS/Maja Smiejkowska

By Andy Bruce

LONDON (Reuters) - Average pay for British public sector workers fell to a 19-year low in October, after adjusting for inflation, according to official data on Tuesday that underscored why so many are going on strike.

Workers in both the public and private sectors have walked out in recent months. Rail workers, teachers, postal staff and criminal defence lawyers have all complained that their pay has not kept up with inflation, which hit a 41-year high of 11.1% in October.

While some smaller, mostly private sector disputes have been resolved, the government has so far refused to budge on public sector pay and is instead looking to tighten laws to make it harder for workers in key sectors to strike.

At first glance, public sector pay is rising and reached an average of 607 pounds ($754) a week before tax in October.

But adjusted for consumer price inflation, this is no higher than the 364 pounds a week the average public sector worker earned in October 2003 and is 6% lower in real terms than in October 2021.

(GRAPHIC-UK public sector pay falls to 19-year low, adjusted for inflation: https://fingfx.thomsonreuters.com/gfx/polling/zdpxddrxlpx/Pasted%20image%201670941032822.png)

Average weekly pay in the private sector - where workers typically have lower formal qualifications and also have less generous pension arrangements - was 628 pounds a week in October, 4% less than a year ago in real terms.

"Is it any wonder there is industrial unrest in the public sector?" former Bank of England rate-setter Andrew Sentance, now a senior adviser at Cambridge Econometrics, commented on social media following Tuesday's wages data.

The government says the pay rises being demanded are unaffordable and that raising pay to match inflation would only prolong the problem.

Bank of England Governor Andrew Bailey reiterated on Tuesday his view that companies would be "sensible" to target pay rises on those at the bottom end of pay scales.

The ONS said 417,000 working days were lost to strikes in October, the highest since November 2011 when just under one million days were lost due to public sector workers walking out in a row over pension reforms.

More than 40,000 railway workers began their latest round of walkouts on Tuesday in a long-running dispute over pay and conditions, causing widespread disruption to Britain's transport network.

© Reuters. A traveller stands in front of a closed gate, as rail workers strike over pay and terms, at Blackfriars station in London, Britain December 13, 2022. REUTERS/Maja Smiejkowska

Strikes are due to take place nearly every day in December, with nurses set to walk out on Thursday for the first time in their union's history.

($1 = 0.8051 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.