The gap between pay growth in the public and private sector is near a record high, official figures show.
Workers in the private sector saw their average pay rise by 6.9% between August and October, according to the Office for National Statistics (ONS).
That compares to wage growth of 2.7% for public sector employees.
Thousands of workers are set to go on strike this week, including nurses who expect to stage their first-ever nationwide walkout on Thursday.
The ONS said: “This is the largest growth rate seen for the private sector and is among the largest differences between the private sector and public sector growth rates we have seen.”
The 4.2% difference between pay growth, which does not include distortions caused by the Covid furlough scheme and lockdowns, is just below the 4.4% gap seen between the public and private sectors between July and September.
Ambulance workers are also planning industrial action later this month and, like other public sector workers, are seeking pay rises above the rate at which prices are increasing, which is known as inflation.
However, despite private sector employees seeing their wage growth outpace the public sector, both have fallen far short of the rate of inflation which is at a 40-year high of more than 11%.
The ONS said that overall, regular pay grew by 6.1% in the three months to October. But taking inflation into account, wages fell by 2.7%.
Thousands of workers across the rail industry staged further strikes on Tuesday which will continue into Wednesday, as well as another 48-hour walkout on Friday and Saturday.
Staff at Royal Mail who are members of the CWU will take strike action on Wednesday and Thursday this week. This will be followed by further walkouts on 23 December and Christmas Eve.
The ONS said that 417,000 working days were lost to strikes in October – the highest since November 2011.
Overall, the total number of working days that have been lost to people walking out in disputes since June – when the ONS restarted collecting data following Covid – reached 1.2 million days. It is the worst five months since April 1990.
The UK’s biggest rail union – the RMT – has held a series of strikes since the summer that have shut much of the rail network in England, Scotland and Wales and threaten to hit businesses in the run-up to Christmas.
Sam Beckett, head of economic statistics at the Office for National Statistics, said that the sectors that have been hardest hit by strike action are transport and storage as well as information and communications.
“That’s been largely driven by the rail and mail strikes,” she told the BBC’s Today programme.
Ms Beckett said it was difficult at this stage to assess how industrial action has affected the wider economy.
“We haven’t really seen the influence of that in our GDP statistics yet. It is too early to say how it will hit the economy more broadly,” she said.
Overall, the unemployment rate rose to 3.7%. The number of job vacancies also fell, down 65,000 in September to November, which was the fifth consecutive fall for this measure.
Ms Beckett said the decline was a sign the jobs market “could be starting to soften a little” and an indication that some businesses were “were starting to pull some of their vacancies because they are reducing activity”.
However, despite the fall, the ONS said job vacancies still remained close to historically high levels, with nearly 1.2 million roles available
There was also a decline in the number of people classed as economically inactive, which is those who are not in employment and have not sought work in the past few weeks. The most notable drop was among those aged between 50 and 64.
Jack Kennedy, UK economist at recruitment firm Indeed, said there was “evidence of some people returning to the labour force from retirement”.
“That may be an early sign of cost-of-living pressures prompting some people to rethink their plans,” he said.
But overall, inactivity remains more than 560,000 higher than pre-pandemic levels and continues to fuel recruitment challenges across a range of sectors, said Mr Kennedy.
Perhaps the most interesting statistic in these job numbers – and the most telling for the future of industrial relations – is the enormous gap between public and private sector wage growth.
While private sector pay growth is still failing to match inflation, private pay packages are rising at 6.9% with public sector miles behind at 2.7%, which is one of the biggest gaps ever seen.
That will add tension to pay disputes where the government is the employer or sets the parameters for pay discussions.
Private companies can afford to slim down their ambitions and pay fewer people more – which is not an option in the NHS.
The numbers bear this out. Vacancies in hospitality are down 11%, whereas vacancies are almost unchanged in public administration and have gone up in education.
This elastic band must surely break at some point. More workers will leave the public sector, jeopardising key services or the government will have to buckle and agree to higher pay awards. It feels like something’s got to give at some point.
Jarrod Ayling, chief executive of Purple Jay Nurseries in south east London, said that despite putting up wages by 16% he is still having problems finding staff.
“It’s extremely hard to get staff at the moment because the early years workforce has been depleted since Brexit and Covid so increasing the wage has increased the number of staff applying, but it’s still slim,” he said.
Mr Ayling said he had raised wages because workers were struggling with the cost of living, with some asking for advances to make ends meet.(BBC)
