Public sector pay freezes may not be a feasible plan for the next government in view of rising inflation and easing pressure on wages in private firms, a report has said.
Average settlements in the private sector are going up, while pay freezes continue to fall, according to a study by the Labour Research Department (LRD). The movement suggested “concessionary bargaining” by unions may be drawing to a close, it said.
Fewer than one in five recent deals in private firms involved a pay freeze, with a quarter worth at least 3%.
The LRD report pointed out that around 1.6 million local government employees faced wage restraints, while the main political parties were planning to impose further freezes.
Lewis Emery, LRD’s pay and conditions researcher, said: “While we may not have seen the back of pay freezes just yet, there is likely to be greater pressure on all employers to settle for a positive increase as pay medians begin to rise.
“Public sector unions are already very unhappy about plans to hold down wages. With the rise in inflation, and pressure from comparisons with the private sector, it may be hard for whichever party is in government after the election to keep the lid on public sector pay.”
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