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Pay deals take a hit during recession.

AVERAGE pay deals are running at just 1% after a slump in settlements, with many workers in private firms receiving no rise this year, new research showed today.

An analysis of 46 settlements for the quarter to July by Industrial Relations Services (IRS) showed that almost half involved a pay freeze.

Pay was frozen in manufacturing firms, while in the public sector settlements were worth an average of 2.3%, down from 2.5% in June.

But recruitment experts claim that, far from demanding more pay in the current climate, staff are just happy to have a job.

Kiersten Wasson, business manager for the Tees Valley office of recruitment specialist NRG, said: "As long as they see they have a role within the company going forward, that's enough."

She said staff were placing more value on "portable skills" that could be used to land another job in the event of redundancy.

Sarah Welfare, of IRS, said pay awards had taken a far greater hit in the current downturn than they did in the recessions of the 1980s and 1990s.

"All the evidence suggests that pay awards will remain subdued for the rest of 2009," she said.

"With rising unemployment, a low minimum wage rise due in October and headline inflation in negative territory, the chances of higher pay rises for employees in the near future will be slim."

From October, the hourly minimum wage for workers aged 22 and over will rise from pounds 5.73 to pounds 5.80, and from pounds 4.77 to pounds 4.83 for workers aged 18 to 21. Nearly one million people are expected to benefit from the new rates.

The Retail Prices Index (RPI), a key indicator of inflation, is expected to remain in negative territory for some time to come despite rising slightly in July to minus 1.4% - up from minus 1.6% in June.
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Publication:Evening Gazette (Middlesbrough, England)
Date:Aug 21, 2009
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