'Real pay will rise after 8-year gap'.
Byline: Jon Griffin Business Editor firstname.lastname@example.org
WORKERS throughout the West Midlands can look forward to the first increase in real pay for eight years, a new survey reveals.
But they will not catch up with pre-recession wage levels for at least another three years, according to EY ITEM Club's special report on the labour market.
The report says: "Negative inflation for part of this year and a steady pickup in nominal wage growth to 1.9 per cent will deliver the first pick up in real earnings since 2007.
"Looking beyond 2015, the EY ITEM Club expects nominal wage growth to continue to accelerate but, underpinned by continued strong growth in the supply of labour, will remain short of the pace achieved in the decade prior to the financial crisis.
"As a result, nominal wages are forecast to grow by 3.7 per cent in 2018, still 0.7 per cent short of the pre-crisis average."
The EY ITEM Club expects strong growth in the workforce to continue to be the dominant feature of the UK labour market over the next four years. The report forecasts that the workforce will expand by more than 1.2 million people between 2014 and 2018, growing at an average rate of 0.9 per cent a year.
Martin Beck, senior economic adviser to the EY ITEM Club, said: "Real earnings have fallen by nearly 10 per cent since 2008, but workers will finally see more money in their pockets this year. However, this is not a normal recovery.
"The move towards later retirement and the huge increase in the size of the workforce has depressed real wages as workers have priced themselves into jobs. We don't expect a return to boom time wage growth any time soon. Employment will continue to be strong, but wage growth will remain relatively modest."
Ainsley Wainwright, Human Capital Director at EY in the Midlands, added: "This growing diversity of the workforce means companies and their HR functions have to manage a labour pool that looks very different from before the financial crisis. As the workforce becomes more diverse, so do its motivations and priorities. To manage this diversity successfully, companies will have to radically change their employee offer with reward structures, training, and incentives."