17 July 2018

Wage growth, which has been stalling since the recession, has now fallen to its slowest pace in six months.

Total pay in the three months to May 2018 rose just 2.5% on a year earlier, data from the Office for National Statistics showed.

This marks a decrease from the 2.6% growth in total pay seen in the year to April 2018, while pay excluding bonuses also fell from 2.8% to 2.7%.

Meanwhile, public sector pay growth fell from 2.4% to 2.1%, lagging behind the 2.4% inflation seen in the same month, eating further into real wages.

"Boosting pay packets should be a priority for the government, but ministers are failing to act," Frances O'Grady, General Secretary of the TUC, said. "We need to get the economy moving again."

The Institute of Employment Rights agrees, and has laid out its recommendations for improving wages in our Manifesto for Labour Law – 25 proposals for reform that have been adopted by the Labour Party as a blueprint for future legislation.

As well as replacing the Low Pay Commission with a Living Wage Commission that would make sure statutory minimums cover the cost of living, our experts recommend the reinstatement of sectoral collective bargaining, which would allow workers and employers to negotiate pay and conditions across entire industries. The agreed wage floor could then be built upon at enterprise level. Much research has demonstrated that this process i the most effective way to improve wage growth and reduce income inequality.

Click here to read more about the Manifesto for Labour Law