Millions of public sector workers still facing pay squeeze, experts warn

17 October 2023 , 19:01

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Shadow Chancellor Rachel Reeves (Image: Getty Images)

Millions of public sector workers are among those still enduring a punishing pay squeeze, experts have warned.

This is despite average pay across the economy outstripping inflation for the first time in two years. The newly-released Office for National Statistics data showed average wages rose at an annual rate of 7.8% between June and August. It prompted millionaire Chancellor Jeremy Hunt to declare: “It’s good news that inflation is falling and real wages are growing, so people have more money in their pockets.”

Yet he ignored the fact that, for many workers, pay is still lagging behind inflation. For example, public sector pay rose by an average 6.8% over the same period. And while private sector pay was up 8%, many of those workers are getting far less than that. TUC general secretary Paul Nowak said: “Real wages are still shrinking across the public sector, retail, hospitality and construction.

For many workers, pay is still lagging behind inflation (PA)

"Let’s not forget, if pay packets had been growing at pre-crisis levels, workers would be on average nearly £15,000 better off.” Shadow Chancellor Rachel Reeves said: “Thirteen years of Conservative economic failure has left working people worse off, with low growth, low pay and high taxes.”

The ONS data also revealed concerns about the wider jobs market, with vacancies dropping 43,000 to 988,000 in the quarter to September, the 15th fall in a row.

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