Pay freeze

Frozen wages

Incidence

In the UK in the second quarter of 1990, wage deals were averaging at 9%, but by the third quarter of 1992 they had decreased to 3.9%. Manufacturing sector awards were running at 2.8%, the lowest since the figures began to be compiled in 1981; 23% of manufacturing firms had imposed pay freezes for more than six months. Only 1% reported pay deals of more than 7.5%, and there were none above 8.5%.

Counter-claim

The advantage of pay freezes is that the unit labour cost in the UK has now decreased to below the levels in Germany and Japan, making the country more competitive in manufacturing.