Pay rises in 2020: heading to a higher level?
The median pay award across the whole economy has risen to 2.7% in 2020, having been at 2.5% for most of 2019, according to the latest monitoring figures from Incomes Data Research (IDR).
The analysis of new pay deals effective in 2020 shows that higher-end awards worth 3% or more account for nearly two-fifths of pay increases overall. The uptick in pay awards is heavily influenced by increases in manufacturing where the median is higher still at 2.9% as a result of nearly half of all awards registering at 3% or above, compared to a quarter of deals at this level in private services.
A key deal is the one for the thousands of workers who operate under the Electrical Contracting Joint Industry Board (JIB) in England, Wales and Northern Ireland, who received a 3% increase with effect from 6 January 2020 in the final year of a four-year pay deal. This deal also influences pay levels for skilled workers in manufacturing.
“Whether this level of pay awards holds will depend on what happens in other sectors. Looking ahead, many organisations will respond to the National Living Wage rising by 6.2% to £8.72 on 1 April 2020 and the median pay award in lower-paying areas is likely to reflect the statutory change” commented Zoe Woolacott from IDR.
Some supermarkets, such as Aldi, Asda and Tesco have already announced plans for 2020 to introduce basic rates for their hourly-paid employees that exceed the statutory amount. April is also a key month for pay setting in the public sector where the previous pay cap has been ended.
The latest figures are based on a sample of 40 pay awards effective between 1 January 2020 and 31 December 2020, mostly at large organisations and together covering over 1 million employees. Very few awards in the sample are from the public sector so the results predominantly reflect the picture in the private sector.
For any queries relating to this research please contact Zoe Woolacott on 01702 669549 or at email@example.com or Ken Mulkearn in our Manchester office on 07792 786532 firstname.lastname@example.org
Note for editors
Incomes Data Research monitor pay reviews across the economy throughout the year and publish findings in ‘Pay Climate’, our quarterly e-bulletin, with additional monthly updates on our website: https://www.incomesdataresearch.co.uk/