The minimum wage is going up in October and there are reports that wages are rising steeply in some sectors but most people you speak to don’t seem to be noticing a difference. So what is really going on?
Across the UK salaries have only risen by 0.7% (according to the Office for National Statistics) but this is very different to the picture in the construction, IT and Engineering sectors where steep increases are being reported. The improved economic climate and rise in property values is fuelling the housing market and consequently demand for skilled trades people such as plumbers, electricians and brick layers is currently out stripping supply. This has had such an impact that brick layers in the capital can now command a weekly rate of £1000. This has led some construction companies to refuse to tender for work in the capital as they feel they simply can’t compete. If this continues there are growing concerns that the salary rises could halt growth in the construction industry.
Positivity about the economic climate is also making employees more confident about seeking out other opportunities. Employed individuals who a couple of years ago were resigned to the fact that they weren’t a lot of job opportunities out there are now taking more interest in the job market. For the first time in a while people are actively looking around for better paid opportunities and employers are starting to report an increase in staff turnover.
All of this is building towards an increase in wages across a range of sectors but are the rises sustainable? Certainly the skills shortage in some areas is likely to continue to fuel higher rates but whether this will continue across other sectors remains to be seen.
