By Richard Johnstone | 15 August 2013
Take home pay in the public sector declined in the three months to the end of July, the fourth consecutive period of decline, according to a survey of earnings.
The Take Home Pay Index, published by the Centre for Economics and Business Research and payments firm VocaLink, found that the amount public sector workers received in their bank accounts fell by 0.1% over the period.
According to the index, which uses real-time bank transaction data to measure take home pay, public sector workers have received less every month this financial year. This is despite the government’s public sector pay freeze having ended in April.
However, the report, which is based on data from 600 public sector organisations, concluded that the pace of decline had stagnated. The 0.1% fall in take home pay was the same as in the three months to the end of June, and is lower than the decline in the three month periods to the end of April (down 0.4%) and May (down 0.3%).
The report stated that public sector pay constraint in the current year, with increases limited to 1%, ‘is certainly continuing to bite’.
It added: ‘With inflation rising to 2.9% in June, workers in the sector will really be feeling the squeeze.’
CEBR chief executive Douglas McWilliams said that, although the number of people in employment is at a record high, the cost of this appears to be relatively weak wage growth.
VocaLink chief executive David Yates added that all households were feeling the pinch as inflation outstripped pay growth.
‘Although consumer confidence has risen in recent weeks, we still cannot rely on domestic demand to fuel economic growth,’ he said.
