RF says household living standards rely on maintaining a tight labour market
Record employment is now delivering healthy pay growth and protecting it is crucial to household living standards, the Resolution Foundation said today (Tuesday) in response to the latest labour market figures.
Regular pay growth (excluding bonuses) was 3.8 per cent in the three months to July 2019 (easing slightly while total pay including bonuses strengthened to 4 per cent). Real pay growth is currently at 1.9 per cent. Average weekly earnings remain £3 a week below their April 2008 peak – highlighting the need for the UK’s current pay recover to continue.
Employment remained at a joint record high of 76.1 per cent. The labour market is now very tight, but has stopped tightening. Vacancies fell by 50,000 so far in 2019, while recent employment growth has been keeping pace with population increases. Self-employment has accounted for a third of jobs growth over the past year.
Nye Cominetti, Economic Analyst at the Resolution Foundation, said:
“Workers across Britain are reaping the rewards of a tight labour market, with employment high and real pay growth approaching two per cent. This is especially encouraging given how poor our recent productivity performance has been.
“With the UK labour market appearing to have settled into a healthy holding pattern, the key task for policy makers is to keep it there. Most obviously this means avoiding unnecessary economic shocks.
“It has taken us ten years to get to a labour market delivering on jobs and pay – household living standards rely on us keeping it there.”