10% more employment opportunities in UK than a year ago but average salary for new jobs tumbles 1%, study shows
UK employers are continuing to hire staff but are offering lower salaries than a year ago, according to an online jobs board.
There were 10% more job opportunities in December than in the same month in 2011, Reed said, but the average salary for new jobs declined by 1% over the year, despite inflation at almost 3%.
Mark Rhodes, marketing director at reed.co.uk, said: “We have seen growth across the board in the majority of sectors and regions as employers become increasingly less cautious about their approach to taking on new personnel.”
The survey echoes official figures which showed unemployment falling dramatically in the three months to October but wages stagnating. The Office for National Statistics said last month employment was 499,000 higher over the period compared with a year earlier, to stand at 29.6 million – a record high. Meanwhile, average earnings, excluding bonuses, were rising at an annual rate of 1.7% – well below the current inflation rate of 2.7%.
The health of the jobs market over the past year has puzzled economists, as employment has risen much faster than economic growth would suggest. One explanation is that anxious workers have had to accept paltry pay rises in exchange for holding on to their jobs, while those out of work have settled for lower salaries simply to get a job.
The Bank of England’s chief economist, Spencer Dale, noted: “The harsh but inescapable reality is that households and families in our economy are worse off – much worse off.”
Economists fear wage growth will remain below inflation over the next few months, but unemployment will rise. Howard Archer of IHS Global Insight said: “While we expect the economy to eke out modest growth in 2013, we doubt growth will be strong enough to prevent unemployment moving up, especially as public-sector jobs will continue to be pared.”
Even if private-sector employment were to edge up over the coming months, he said there is a danger it would not be enough to offset job cuts in the public sector and the rising number of people of working age.
He said unemployment could rise gradually to a peak of 2.7 million towards the end of the year, or the beginning of 2014, giving an unemployment rate of 8.2%. He expects wage growth to be limited to just over 2% in 2013, while inflation could reach 3% early this year.