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IRS pay databank: the latest findings The median basic pay increase has risen to 3.5% in the three months to the end of January 2007, ending a four-year stay around the 3% benchmark level.
What the other pay commentators say Latest pay settlement figures from the LRD and the EEF.
Key negotiating statistics Inflation, average earnings, IRS measure of settlements, IRS survey of inflation forecasts, IRS survey of earnings forecasts.
IRS pay databank: the latest findings
Our latest findings are based on a provisional analysis of 106 pay awards concluded during the period from 1 November 2006 to 31 January 2007, covering a total of 134,660 employees. Our analysis of the 78 basic pay awards in our sample reveals that:
Basic pay deals rise to 3.5%. The median - midpoint in the range - basic pay increase stands at 3.5% in the three months to the end of January 2007, up from 3% in the previous rolling quarter. This is the highest median recorded by IRS since November 1998.
Range of pay awards higher. The lower quartile measure has continued on an upward trend, rising to 3% in the three months to the end of January 2007, up from 2.8% in the previous rolling quarter. The upper quartile measure rose 0.4 percentage points, to stand at 3.9% in the three months to January.
Weighted median running at 3.9%. The measure of pay awards taking into account the number of employees covered by each review - the weighted median - showed even sharper growth, rising by 1.1 percentage points to stand at 3.9% for the quarter to 31 January 2007. High pay awards covering large bargaining groups added this month include the 5% increase covering 50,000 electrical contracting workers in the third year of a three-year award from 8 January 2007, and a 4.4% increase of minimum rates from 1 January for more than 20,000 agricultural workers in
Majority of pay deals higher than a year ago. A matched sample analysis of 51 pay awards, where both the current and previous settlements for the same employee group have been collected, reveals that just under three-quarters (74%) were higher than the previous year's award, while 12% were lower and the remainder (14%) were worth the same.
Manufacturing deals higher than services sector. The median pay award in the manufacturing sector for the three months to the end of January 2007 matches the whole-economy median, at 3.5%. However, pay awards in the services sector are slightly lower, with the median pay settlement at 3.4% in the rolling quarter to January 2007.
Merit deals worth 3.6%. IRS researchers monitored 28 performance-related pay settlements in the quarter to January 2007. An analysis of the 24 merit awards for which we have details of the paybill increase reveals that the median merit budget is pitched at 3.6%. Merit awards added to the IRS pay databank this month include a 3.8% merit pot for 4,000 employees at finance firm AEGON
What the other pay commentators say
Annual figures
Labour Research Department (LRD) reports that the 12-month median of settlements was 3% in January 2007, unchanged from that recorded in December 2006.
Quarterly figures
EEF reports a decrease in manufacturing pay awards. Latest provisional figures show that settlements in the sector averaged 2.9% in the three months to January 2007, down from the three months to December 2006.LRD, in its survey of union-negotiated awards for the whole economy, reports a median level of pay settlement (unweighted) of 3.5% in the three months ending January 2007, up from the three months to December 2006.
Inflation
Retail prices index: 4.2% (12 months to January 2007)
Average earnings
Earnings, whole economy: 4.0% (12 months to December 2006)
IRS pay databank
IRS measure of settlements: 3.5% (three months to January 2007)
IRS survey of inflation forecasts
First quarter 2007
Range 4.0% to 4.6%; average 4.3%
Second quarter 2007
Range 3.2% to 4.4%; average 3.9%
IRS survey of earnings forecasts
First quarter 2007
Range 3.9% to 5.0%; average 4.4%
Second quarter 2007
Range 3.9% to 4.8%; average 4.4%
