Pay increases have plunged and are continuing to decline, according to Labour Research Department’s (LRD) Payline database for April.

The median for April pay settlements stands at just 1.5%, and if long-term deals are excluded, it is zero.

This compares with monthly all-deals Payline figures of 4.2% in December, 3.2% in January, 2.5% in February and 2.1% in March, showing a gradual decline from the beginning of the year.

The more stable quartely median figure showed exactly 4% in the three months to December and this had only fallen to 3% in the three months to March, reflecting the large number of settlements in January.

But the median for the quarter to April, weighted towards the larger number of deals done in April, is estimated at around 2% (final April figures are not yet available).
 
Lewis Emery, LRD’s pay and conditions researcher, says: “We are seeing the impact of recession really beginning to hit home on pay settlements, particularly in manufacturing, although some of the deals we have recorded show that significant pay increases are still possible.
 
“It is not certain whether April’s figures represent a long-term trend. But it is worrying that employers are not only negotiating with unions over pay restraint, but also attempting to erode basic conditions, such as pensions, that will affect workers in the long term. Unions are likely to resist this strongly.”