Through a series of online surveys, data collecting, and good old fashioned door-to-door, the Chartered Institute for Personnel and Development has concluded that roughly three-fourths of the UK workforce received no pay increase for the first six months of the year. The government’s mandated pay freeze for public servant salaries is part of why the number is so excessively high, but there’s more to it than that. The economy has simply not performed as well as private sector employers had hoped, keeping the majority of pay across both public and private sectors at a virtual standstill.
It might not seem like a justifiable expectation especially during tough economic times, but salary raises are the only way average-income British families are going to be able to combat the ever-increasing cost of living in the United Kingdom. So long as wages stay stagnant the majority of British consumers are going to remain conservative when it comes to spending. As any first-year economics major can tell you, so long as consumer spending is hindered any-and-all additional economic growth is doomed to flat line.
So why then did the government decide to freeze public sector pay? Mostly for theatrics, since the Conservative-led coalition government is dedicated to projecting the idea that they’re as frugal as possible. In terms of real world actions and reactions, forcing several million public workers to withstand a long-term salary standstill is just going to further inhibit the nation’s chance to make a complete recovery from the economic slump it’s been in since the autumn of 2008.
With that said, the year is only half over. Charles Cotton of the CIPD added to the released data assurances that private sector service salaries are likely to see a boost toward the end of the year. Whether or not that’s projected to only be a temporary boom on account of the holiday season he did not say. What’s for certain is that the majority of his confidences are based on the fact that the minimum wage is set to increase come October.
As far as the public sector goes, no word yet on when the pay freeze will be lifted.