EMPLOYERS ARE predicting that pay rises this year will come in at around 1%. With inflation at 2.3% and rising, most of us are in for a pay cut in real terms. The employers’ predicted level of increase has fallen by one third over the last three months.
This gloomy news will hit not only the lowest paid urban and rural workers but also the middle classes on whose votes the Tories rely. The prediction is further confirmation that it was actually the worsening state of the economy that prompted the Tories’ Theresa May to call a snap “cut and run” General Election and not the fanciful idea that Brussels bureaucrats are impressed by the size of her majority.
The figures come from a survey published by the Chartered Institute of Personnel and Development (CIPD) and the Adecco Group (an employment agency). The figures are based on a survey of over 1,000 firms.
The employers’ prediction of 1% pay rises is the lowest found by this survey for three years. There are a number of factors causing employers to turn pessimistic now.
Employers are still pessimistic about what Brexit will do to the UK economy. Large employers are saving up in case they need to relocate to mainland Europe, while smaller and medium employers are calculating the value of lost exports. It’s not a good time to invest in labour for any of them.
The global recession which began in 2008 is still nowhere near over – despite eight years of austerity which the Coalition and Tories said would strengthen the economy. Employers are reluctant to commit to higher wage bills. This general trend depresses the amount of money that employees of one company have available to spend on buying goods and services from other companies, keeping the whole economy on a downward cycle.
Eight years of recession or near recession have been eight years of low investment in IT and better technology or material. This chicken is now coming home to roost, with UK firms becoming increasingly uncompetitive – as the UK’s low productivity figures show.
The economy needs a boost of the kind which can only be delivered by national investment. The General Election on 8th June will decide whether the UK gets a government which will do that – or one which continues with the disproven strategy of austerity.
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The Tories claim they will tackle workers’ rights: