George Osborne’s labour market policies ‘will backfire and hit pay growth’

Last Updated: December 30, 2015By

The Chartered Institute of Personnel and Development (CIPD), the professional association for human resources managers, argues today that pay growth is … likely to slip back in 2016 to just 2 per cent, as employers pass on the additional costs from the Chancellor’s new national living wage (NLW) and apprenticeship levy on to their workers in the form of lower pay increases than they would otherwise have received.

“With inflation close to zero some employers will try to manage these costs by restricting pay rises for their better-paid employees,” said Mark Beatson, the CIPD’s chief economist.

He also described … Bank of England and OBR forecasts as “very optimistic”.

Source: George Osborne’s labour market policies ‘will backfire and hit pay growth’ | Business News | News | The Independent

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One Comment

  1. Jonathan Wilson December 30, 2015 at 5:24 pm - Reply

    I notice that what they mean is… “to keep our profits and share holder dividends the same, we will squeeze the middle earners in our companies by not giving them pay rises to offset the increased costs at the bottom end”.

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