Average earnings growth goes negative.

purch

Generali wrote: »

As youth unemployment falls, you'd expect the average income to fall.

Another unintended consequence of the minimum wage.

Thrugelmir

Generali wrote: »

Is this common though? When people were taking pay cuts in 2009 it was all over the newspapers whereas you don't really hear about this phenomenon.

I'm not saying it is or it isn't, just that we need to take care with confusing anecdote and data.

Pay will also be impacted by auto enrollment into pension schemes. As employers won't be in a position to offer both a pay rise and a pension contribution to their employees. So the impact is more related to disposable income rather than taking an actual pay cut.

Generali

Thrugelmir wrote: »

Pay will also be impacted by auto enrollment into pension schemes. As employers won't be in a position to offer both a pay rise and a pension contribution to their employees. So the impact is more related to disposable income rather than taking an actual pay cut.

So are pension contributions not included in the pay data?

Graham_Devon

Well, at least it's given the green light for the BOE today to suggest there will be no interest rate rise this year as the focus for interest rate increases now switches miracolously to wage growth and moves away from the focus over the last couple of months of spare capacity.

http://www.telegraph.co.uk/finance/bank-of-england/11030408/Bank-of-England-no-early-interest-rate-rise-as-wages-forecast-slashed.html

Jeremy Cook, of currency firm World First, said that while spare capacity had been reduced, the focus on wages meant that those who expected a rate hike at the end of this year "are getting smacked hard".

gbsilp

Graham_Devon wrote: »

Well, at least it's given the green light for the BOE today to suggest there will be no interest rate rise this year as the focus for interest rate increases now switches miracolously to wage growth and moves away from the focus over the last couple of months of spare capacity.

http://www.telegraph.co.uk/finance/bank-of-england/11030408/Bank-of-England-no-early-interest-rate-rise-as-wages-forecast-slashed.html

Who knows what Carney's up to? Personally I think he is trying to force a repricing of risk assets by injecting volatility.

chewmylegoff

Generali wrote: »

So are pension contributions not included in the pay data?

The report specifies that it is measuring pay before tax and other deductions.

I think what he is getting at, though, is that the law now requires many employers to make an employer's contribution to a pension scheme - this would not be captured even though your overall remuneration has increased.

Thrugelmir

Generali wrote: »

So are pension contributions not included in the pay data?

Nor do any other factors that could constitute an employees emoluments such as company car, health insurance, staff discounts etc.

As with all these stats that make the headlines. They have to be viewed in a far wider context and not isolation.

The eventual goal of course is rebalancing the economy. A war that is being fought on many fronts concurrently. Whether there's sufficient resilience in the economy to withstand all the policy strands we'll have to wait and see.

michaels

Isn't there another serries of average pay of those in work which does show a more reasonabe increase?

Also with the number in employment rising rapidly total pay in the economy will also be rising enough to support the increase in consumption needed to give decent gdp growth and rising house prices.

All this is consistent with the labour pool being much larger than the uk workforce, readily explained by eu freedom of movement and the continuing euro zone recession.

saguk1234

Wages down, house prices up. Makes sense!

ukcarper

saguk1234 wrote: »

Wages down, house prices up. Makes sense!

It can I can see why can you.