A new report from the Labour Research Department (LRD) may have the country’s contractor workforce tightening their belts again, even though their clothes have already been feeling distinctly baggy since the recession struck. It won’t have escaped many that the cost of living has been steadily rising over the last few years, with big hikes in the price of food and petrol in particular. The LRD is now warning that the prospects for pay remain weak, with median pay rises for workers (including many contractors who work through umbrella companies) still trailing behind inflation by a significant margin.
The Associate Director of the Work Foundation, Stephen Overell, remarked that UK businesses are doing everything within their power to minimise expenditure whilst the economy remains in such a parlous state. Over the last two years, huge numbers of workers have gone without significant pay rises, with some even having their income frozen. Positive change in the economy is still likely to take some time before feeding through into meaningful wage settlements, he added.
But it’s not just employees and the contracting community who are feeling the pinch: the Institute of Directors has just revealed that virtually half of all executives have had to take pay cuts over the last year. So, pay freezes, and possibly even pay cuts, are likely to be with us for some time to come. They may be preferable to job losses, however, and sometimes hardship can be the mother of invention. Shopping trolleys are unlikely to contain many luxury items for a while at least; but maybe there are as yet undiscovered recipes for spam and baked beans waiting to be found.
