7 April 2011
Take-home pay continues to rise more in the public sector than in the private sector, according to an analysis of pay packets.
The Take Home Pay Index, produced by payment systems company VocaLink, revealed that for the three months to March 2011, the average annual rise in public sector take-home pay was 1.7%, compared with 0.1% in the private sector.
The analysts also note that job losses in the public sector could push average pay higher if large numbers of low-paid workers were laid off.
VocaLink chief executive Marion King said: ‘Although public sector take-home pay growth has seen a slight increase, private sector earnings are at an all-time low. In particular, the services index has suffered a significant drop, which is reflected by the number of retailers that have reported a sharp deterioration in trading conditions in recent weeks. It’s clear that consumers are starting to rein in discretionary purchases amidst the squeeze on real incomes and concerns about job security.’
Douglas McWilliams, chief executive of economics consultancy the Centre for Economics and Business Research, added that Office for National Statistics accounts showed ‘that real [inflation-adjusted] household disposable income fell at an annual rate of 0.8% in 2010’. This was the first annual decline in real incomes since 1981 – 30 years ago, he said, adding: ‘Ongoing weakness in the labour market is another key factor constraining wage growth at present and is likely to continue over the coming months.’
