By Daniel Hunter
Workers at Britain’s FTSE 350 manufacturing companies will be £54 per month worse off in real terms this Christmas, compared to last year, according to the VocaLink Take Home Pay Index.
This real fall in pay packets can be equated to one Christmas present, such as this year’s must-have Christmas toy, the Furby, which comes in at £54.97.
FTSE 350 workers’ wages have also suffered over the past year, according to the VocaLink FTSE 350 average salary index. In October 2011 FTSE 350 workers were earning an average monthly salary of £1,497, but in October 2012 average wages were down to £1,469 in real terms, meaning employees took home £24 less in October 2012 than in October 2011 — the same price as a Cabbage Patch Kid doll.
On average monthly wages fell by £34 in real terms in October 2012 across the VocaLink Take Home Pay Index sectors, when compared to October 2011.
The VocaLink Take Home Pay Index uses actual pay data to chart the average wages of public and private sector workers. The data is adjusted for CPI inflation and is therefore a gauge of how household spending power has changed over time.
This real decline in pay packet power experienced across the VocaLink Take Home Pay Index sectors is likely linked to persisting price pressure as UK inflation continues to rise. In October inflation on the consumer price index climbed to 2.7%, its highest reading since May 2012. This recent pick-up in inflation has seen real annual take home pay growth move into negative territory, particularly in the manufacturing sector which has seen a take home pay decline of more than 3% on a year-on-year basis.
This comes despite recent ONS figures which show that between August and October 2012 the UK experienced the biggest quarterly fall in unemployment since 2001. This fall in unemployment, combined with the continued weak wage growth, suggests that businesses are curbing pay packages in order to try and control costs.
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