Private sector pay settlements at 3% for first quarter of 2012

Median pay settlements in the private sector were 3% for the first quarter to the end of March 2012, according to figures from Incomes Data Services (IDS).

The IDS Pay report also showed an increase in the proportion of settlements recorded between 3 and 3.99%, at 38% of deals compared to 33% in the three months to the end of February 2012.

Ken Mulkearn, editor of the report, said: “While pay settlements are showing more strongly than last year, the median remains below inflation. The failure of wage rises to keep up with increases in the cost of living is placing downward pressure on household incomes.”

However, there is some variation between sectors. For example, the finance and retail sectors have seen rises slightly below the 3% benchmark figure. But increases in the transport sector and in some media organisations have been above 3%.

Within the broader manufacturing and production sector, above average increases have been found in the oil, and in vehicles and components manufacturing sectors, compared to lower awards in chemicals and pharmaceuticals manufacturing.

The report also found that the proportion of settlements resulting in pay freezes has remained fairly constant, at 8% of pay reviews, primarily in the manufacturing, construction and not-for-profit sectors. At the other end of the scale, around 20% of reviews resulted in awards of 4% or higher.

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