Bargaining Statistics

As more pay negotiations are done locally in Scotland it can be useful to have regional figures to supplement national UNISON briefings.

In this brief you will find the latest:

1. Claimant/ILO unemployment figure
2. Average Earnings
3. Inflation
4. Earnings Forecasts
5. Latest pay settlement trends in the Public Sector
6. Recruitment and retention in the public sector
7. Equal Pay issues
8. Bargaining agenda 2003
9. New Earnings Survey 2002 Labour market data broken down by region, gender and occupation.

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1.LATEST CLAIMANT/ILO UNEMPLOYMENT FIGURES

As can be seen form the figures below the total number of people claiming unemployment benefits, in both the UK and Scotland, decreased significantly in the three months between Oct 2002 and Dec 2002. The ILO unemployment figures also show a decrease in the number of unemployed, again in both the UK as a whole and in Scotland, between Mar 2002 and Dec 2002. Whilst the percentage figures remain stable the actual numbers of unemployed have fallen sharply in Scotland, from 173,000 in the March-May 2002 period to 156,000 in December 2002. The trend for the UK as a whole also shows a decline in the numbers of unemployed for the period Mar to Dec 2002.

Fig.1 UK and Scotland Claimant unemployment figures Oct 2002 – Dec 2002

	Claimant Unemployment UK (seasonally adjusted)			Claimant Unemployment Scotland (seasonally adjusted)
		000's	% of workforce	000's	% of workforce
Dec 2002		932.0	3.1	99.1	4. 0
Nov 2002		934.1	3.1	99.9	4.0
Oct 2002		940.4	3.1	100.5	4.0

Fig.2 UK and Scotland ILO unemployment figures Mar 2002 – Dec 2002

	ILO Unemployment UK (seasonally adjusted)			ILO Unemployment Scotland (seasonally adjusted)
		000's	% of workforce	000's	% of workforce
Oct-Dec 2002		1,506	5.1	156,00	5.9
Jul-Sep 2002		1,541	5.3	176,000	6.8
Mar-May 2002		1,497	5.1	173,000	6.8

Scottish local area claimant count

The claimant count as a proportion of the resident working age population was lowest in Aberdeenshire, at 1.3 per cent and highest in North Ayrshire, at 5.0 per cent.

(GRAPHIC TO FOLLOW)

Fig.3 Scottish local area claimant count.

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2. AVERAGE EARNINGS UK & SCOTLAND

Although UK average earnings in April 2002 were £465 per week, half of all full-time employees earned less than £383. The top 10% of the earnings distribution earned more that £752 per week, while the bottom tenth earned less than £216. Over the past decade, pay for top earners has risen more rapidly than for the rest of the workforce. As a result, the average earnings figure has been pulled upwards, leaving a growing majority of full-time employees below the average. This trend has been particularly strong since 1997. The growing disparity of earnings in Britain shows that, in the past decade, earnings of the top 10 per cent of employees have climbed by nearly 54 per cent, while the lowest 10 per cent of full-time workers have seen their earnings rise by just 45.6 per cent. The National Minimum Wage has done something to boost the position of the lower paid since its introduction in 1999, but has had little impact on the growth in overall earnings inequality.

Fig.4 Male and Female Average Earnings, UK & Scotland

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3. INFLATION

Fig.5 Latest Retail Prices Index (RPI) figures released Jan 2003: 1987=100

Inflation forecast

The inflation rate for November 2002 rose to 2.6 per cent, the highest level since February 2001. The rate was pushed up by higher housing and motoring costs than twelve months previously and higher prices for leisure services and winter clothing. Inflation is expected to continue to rise during the first half of 2003 to average about three per cent in the second quarter. The main impetus behind the expected rise in inflation comes from the impact of higher food, petrol and housing costs compared to the previous year.

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4. EARNINGS FORECASTS

A comparison of private sector and public sector average earnings growth, shows that for much of 2002 there was little difference between them. Prior to 2001 average earnings growth in the private sector ran well ahead of the public sector, but that relationship was reversed in 2001. In October 2002, public sector earnings growth rose to 5.8 per cent and the index rose to 131.6, lifting the index quite close to the private sector index level of 133.9. ( The index measures how far average earnings have risen since it was last re-based at 100 in 1995.)

Inflation is forecast to move up to 2.75 per cent in the coming months and is expected to reach 3 per cent by the summer. As a result of these inflationary increases, the range of basic pay settlements is expected to nudge higher, with the core range likely to be around 3 to 4 per cent. Government policy has encouraged the spread of long-term pay deals in the public sector, with the majority giving increases of 3 to 4 per cent in 2003. A further upward pressure on pay came from the increase in the National Minimum Wage which rose to £4.20 an hour in October last year, with the youth rate increased to £3.60 an hour

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5. LATEST PAY SETTLEMENTS IN THE PUBLIC SECTOR

Three-year deals have become a growing feature in public sector pay settlements over the last couple of years and this trend looks likely to continue for the foreseeable future at least. Indeed, with a large part of the public sector locked in these long-term deals some of the biggest groups will gain increases around the 3 to 4 per cent this coming year, matching those of the private sector. There are strong expectations that three-year deals will be used as vehicles to launch 'Agenda for change' across the NHS. It has been widely trailed in the NHS that a three-year deal worth around 10% will be brought into effect form April 2003 so that the new pay arrangements under 'Agenda for change' can be introduced

within this framework. This has the potential to effect 1 million NHS employees as 'Agenda for change' comes in over 2003 and 2004. Local government workers in Scotland are currently in the last year of a four-year deal that has witnessed overall pay rises ranging from 16.37% at the bottom of the scales to 11.29% at the top within this period. This year, the last year of the current deal, will see an increase of 4% for Scottish local government workers. As a result of higher inflation, stronger economic growth and a robust labour market, pay settlements are expected to be higher across the private sector in 2003.

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6. RECRUITMENT AND RETENTION IN THE PUBLIC SECTOR

Recruitment and retention problems have continued to be central issues across the public sector and new initiatives to respond to staffing problems are an integral part of many developments on pay. Pay scales are being shortened to aid retention and golden hellos are also more widespread to aid recruitment. In 2002 the Audit Commission published a report on recruitment and selection difficulties in the public sector, which looked at some of these problems. It found that staff felt that they were being overwhelmed by bureaucracy and paperwork, had insufficient resources, lacked autonomy, felt undervalued by managers, that pay did not 'feel fair' and that the change agenda felt imposed or irrelevant.

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7. EQUAL PAY ISSUES

Gender pay gap widens

In April 2002 women's average hourly earnings were £10.22 an hour, 81.1% of men's earnings, which were £12.59 an hour. These figures represent a widening of the gender pay gap as women's earnings had been 81.5% of men's in 2001. The widening of the gender pay gap was largely the result of the growth in earnings for men in the top income distribution bracket, outstripping the growth in women's earnings at this level. However, in the lowest earnings brackets women's earnings grew faster than men's, partly as a result of the higher minimum wage and higher public sector pay, both benefiting women more than men.

Fig.6 UK Full-time & Part-time earnings 2002: Average Gross hourly earnings and weekly earnings

(Source: NES 2002, Office National Statistics)

Fig.7 Scottish Full-time & Part-time earnings 2002: Average Gross hourly earnings and weekly earnings

(Source: NES 2002, Office National Statistics)

Progression on Equal pay

A key theme of many of the long-term deals signed in the public sector has been reform of pay structures, often involving shortening the number of steps it takes to reach the market rate for the job, and an increasing number make changes to end gender pay discrimination.

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8. BARGAINING AGENDA 2003

With the general economic picture looking bumpy for the year ahead, 2003 is being predicted as a difficult and busy year for those involved in bargaining negotiations. The key bargaining issues affecting trade unions and employers in 2003 are likely to focus on the following areas:

• Dynamic labour markets

In planning for pay in 2003 it is considered wise to assume that the current high levels of employment will remain fairly stable. There will be further job losses as well as gains, with many parts of the country continuing to experience full employment whilst unemployment will continue to remain high in many traditional inner city areas.

• Skill shortages

Employers continue to report long-term shortfalls of key staff in areas such as transport, construction and call centres. The publication of an Audit Commission report on recruitment and retention has highlighted the extent of staffing problems in the public sector also. A possible return to economic growth in the next 12 months will place further pressure on employers in relation to staff shortages in key areas.

• Pay benchmarking

There has been increased use of pay benchmarking across almost all industries. Employers are actively comparing their own rates against those of other firms in their sector as well as locality. It is thought that in many instances maintaining salaries at market levels will mean pay adjustments outside annual pay reviews.

• Long term agreements

Government policy has encouraged the spread of long-term pay agreements in the public sector. In the public sector and in construction there are high increases of 5% or more due in 2003, but overall the main range for increases under long-term deals is 3% to 4%.

• Equal pay

The issue of closing the gender gap rose to the top of the bargaining agenda in 2002. In the public sector all government departments and agencies are to carry out an equal pay audit by April 2003 and are expected to have drawn up a plan to eradicate pay discrimination. Trade unions are likely to make equal pay a key issue in the next round of pay bargaining.

• Reforming pay systems

Many employers have concentrated on changing payment systems in the past year, responding to market forces, altering pay progression systems and introducing new bonus schemes. Some organisations, in both the public and private sectors are introducing shorter pay ranges up to a market range for the job.

• National minimum wage

An increasing number of employers are moving their lowest rates to levels above the NMW. In an effort to improve the earnings and personal dignity of low-paid workers, many trade unions are currently campaigning for a minimum wage figure of half of male median earnings, with a minimum wage rate of £6 an hour with no lower youth rate.

• Training & Learning

Training & Learning is increasingly seen as integral part of the collective bargaining agenda. The rights of employees to access learning opportunities and to acquire new skills are seen as central to core trade union concerns about pay, progression and equality in the workplace.

• Public sector pay modernisation

There is a lengthy agenda of ongoing negotiations aimed at pay modernisation in the public sector. The long awaited outcome of the "Agenda for Change" negotiations is well overdue with major implications for the whole of the NHS and reforming pay systems to ensure progression and equal pay is a priority in central government.

• Pensions

Pension provision is likely to be a lively issue in the coming year as employees and unions look to safeguard their position. As more companies close final salary schemes to new members, leaving the option of joining a money purchase plan or relying on the state to provide, trade unions have begun voicing their concerns and are looking to take action to preserve as many final salary schemes as possible.

• Working time

Changes to working time have been an issue in quite a large number of bargaining groups recently and this is set to continue in 2003. In addition, flexible-working time is seen as essential in family friendly firms.

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9. NEW EARNINGS SURVEY 2002

Section E of the New Earnings Survey 2002 (published in February 2002) consists of regional labour market data. Data showing the increase in average weekly pay April 2001-2002 reveal interesting statistics:

Fig.8 Increase in average total weekly pay by Scottish region (April 2001- April 2002)

Scottish regional figures for average weekly pay increases show that above national average increases have occurred in the Highlands, Edinburgh City and West Lothian, confirming the widely held view that the local economies in these regions are buoyant. The opposite is true of areas like Glasgow City and Dundee City where the figures would seem to confirm the view that these local economies are in decline, for the time being at least.

UK & Scotland average weekly and hourly earnings 2002 – Male and female, manual and non-manual

Full-time manual males working in the community, social & personal activities sectors experienced a decrease in their average hourly earnings in Scotland between 2000 and 2001. However, weekly earnings for this group of workers showed a modest increase, suggesting employees in these groups must be working longer hours.

The same was true of the average weekly earnings of males working in the Public administration & defence sector. However, the hourly rate for men working in this sector slightly increased over the same period 2001 – 2002, highlighting that on average less hours are being worked per week by full-time males employed in this sector.

Full time manual males working in the gas, electricity and water services in Scotland experienced substantial hourly and weekly pay increases between 2001 and 2002.

Fig.9 Average Weekly/Hourly earnings - Full Time Manual Males on Adult Rates

Fig.10 Average Weekly/Hourly earnings – Full Time Non Manual Males on Adult Rates

Fig.11 Average Weekly/Hourly earnings – Full Time Males on Adult rates

Fig.12 Average Weekly/Hourly earnings – Full Time Manual Females on Adult rates

Fig.13 Average Weekly/Hourly earnings – Full Time Non Manual Females on Adult Rates

Fig.14 Average Weekly/Hourly earnings - Full Time Females on Adult Rates

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FURTHER INFORMATION:

UK Official National Statistics Website:

http://www.statistics.gov.uk

UNISON Intranet/Internet site :

http://www.unison.org.uk

This is UNISON's UK home page and should be the starting point for most

searches. The Bargaining Support Unit maintains a wide range of information online including journal abstracts, statistics, UNISON documents and access to the LRD database. They also provide links to other web sites.

 UNISON Scotland web site :

http://www.unison-scotland.org.uk/

UNISON Scotland's home page has links to all of the P&I Briefings, policy and campaigns

information, along with links to other useful web sites.

TUC Web site:

The TUC site provides good information http://www.tuc.org.uk and you can register

to receive regular email bulletins on a range of employment law, health and safety and equality issues.

Other useful sites include:

Incomes Data Services (IDS)

http://www.incomesdata.co.uk/

Industrial Law Journal

http://www3.oup.co.uk/indlaw/contents/

Department of Trade and Industry

http://www.dti.gov.uk

Equal Opportunities Commission

http://www.eoc.org.uk/

Labour Research Department

http://www.lrd.org.uk/default.php3

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