Political uncertainty hits wages
Rachel Muller-Heyndyk, October 18, 2019
As the UK waits to hear if parliament will approve Boris Johnson’s Brexit deal, research reveals that uncertainty has already taken its toll on salaries
Around half (53%) of UK salaries have suffered pay freezes or decreases over the past 12 months, according to data from Jobrapido.
The research examined the salaries of more than 1.2 million jobs across more than 20 different industry sectors in the UK between July 2018 and July 2019. Nearly a quarter of salaries (24%) have been frozen while nearly three in 10 (29%) have decreased.
Rob Brouwer, CEO of Jobrapido, said that political uncertainty has taken its toll on salaries. "Undoubtedly the climate of political and economic uncertainty in the UK has taken a toll on people’s salaries over the past 12 months, and the latest forecasts from the OECD predict a no-deal Brexit will slice almost 3% from the UK's economic growth over the next three years compared with just 0.6% from the rest of the EU. But it still remains to be seen what happens at the final Brexit hurdle," he said.
Last night (17 October) prime minister Boris Johnson announced that he had reached a deal with the EU. Johnson and EU Commission president Jean-Claude Juncker called it a "fair" outcome and Juncker said there was no need to extend the Brexit deadline.
However, the Democratic Unionist Party (DUP), which the Conservative government relies on for support, said it will not back the deal. In a statement the DUP said: "These proposals are not, in our view, beneficial to the economic wellbeing of Northern Ireland and they undermine the integrity of the Union."
Others expressed concerns over what the deal could mean for workers' rights. TUC general secretary Frances O'Grady said it would be "a disaster for working people".
Labour leader Jeremy Corbyn said the deal was "worse than Theresa May's".
"These proposals risk triggering a race to the bottom on rights and protections, putting food safety at risk, cutting environmental standards and workers’ rights, and opening up our NHS to a takeover by US private corporations," he said.
The Jobrapido research found that ongoing uncertainty is impacting some sectors more than others. With an 8% drop (about £4,500 less year on year), computer and mathematical occupations suffered the most significant salary reduction. However, some industry sectors (47%) have bucked the trend and shown salary increases, including legal occupations, life and social science roles, construction, architecture, design, and farming and fishing industries.
For more than one in four of these sectors (26%) the salary increase was less than 3%, with just a few categories having a growth of more than 5%. Legal occupations registered the most significant increase of more than 7.5% (an additional £3,200 year on year).
Brouwer said that some sectors are also seeing a "growth of new jobs".
"For example, in most of the technological and fast-growing AI-related fields, where demand far outweighs supply, those who have the skills are being rewarded with princely salaries," he explained.
Organisations should take time to re-examine skills and career paths, he said: “While UK workers may have to brace themselves for a time of salary stagnancy, the current climate presents a good time to re-evaluate career paths and look at acquiring new skills or even re-training in a new occupation. Perhaps it is time to make this happen and seize available opportunities despite adversity.”