By: Geoff Tily
May 19, 2019
Recent reports on wage growth disguise the fact that only high earners are benefitting.
In recent months, headline figure for wages have hit post-crisis records. But there is growing evidence – from industry figures, facts on euro-millionaire bankers, and the consequent distributional effects – that pay gains are for the few. Reeling from the most severe pay crisis for 200 years, the many have little reason to celebrate.
Pay growth in finance
Headline pay has risen to a post-crisis high of 3.4% over the past three months, up from 2.6% a year ago (and still far from a big deal given the pre-crisis average was 4.0%). But over the year the stand-out movement has been a near doubling of pay growth in ‘finance and business’ (from 2.3% in January 2018 to 4.3% in Jan 2019). A surge in construction pay has retreated a little (orange in the graph below); manufacturing pay (yellow) has steadily declined; pay in distribution, hotels and restaurants (purple) is slowing. The public sector also gained over 2018, but only modestly.