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The rewards from the UK’s car production boom are not filtering through to all blue-collar workers on the production line, as the lowest-paid see their earnings being eroded despite a surge in output and profits.
A sharp rise in agency staff and temporary contracts at the UK’s booming car factories has meant the average wage for almost a third of the industry’s workforce has fallen in real terms over the past four years, according to a Financial Times investigation.
The falling salaries and increased use of workers on flexible hours calls into question the true benefits of one of the country’s most lauded post-recession industrial recoveries.
UK factories have seen production of motor vehicles increase by 45 per cent in the past four years, as the £55bn industry makes more cars with proportionally fewer workers.
Over the same period, average salaries in real terms have risen just 2.3 per cent, and the wages of the lowest paid 30 per cent have fallen 7.5 per cent, according to data from the Office of National Statistics.
Meanwhile, the average director at the six largest UK carmakers has seen their pay increase 19 per cent.
“Everybody is taking advantage of weak regulation to hire lower-paid, less permanent workers,” Roger Maddison, automotive national officer at Unite, the trade union, told the FT. “There is still a lot of work to be done until the full benefits of this UK car resurgence trickle down to everyone who is contributing.”
Manufacturers say that wage freezes, reduced hours and lower compensation were among compromises struck with workers during the recession to protect UK jobs and factories from closures.
No UK car factories have been earmarked for closure since the recession, while the slump in European car sales since then has forced the shuttering of plants in Germany, France, Belgium and Italy.
The news comes as government data suggest real wages in the UK have fallen consistently since 2008, as earnings growth fails to keep up with rising inflation.
Pressure on earnings has become a key battleground between the coalition government and the Labour opposition, which has claimed that the UK’s economic growth since the recession has not been to everyone’s benefit.
UK car production topped 1.5m in 2013, the highest since 2007, as carmakers such as Jaguar Land Rover and Nissan tapped strong overseas and domestic demand to ramp up output.
But despite a recent spurt in hiring from major manufacturers, only 87,000 people were employed building motor vehicles last year, according to government data, below 2007’s total of 92,000, and well short of 2004’s 123,000 workers.
Those workers earned a collective £3.6bn last year, 19 per cent more than in 2009, but a quarter less than 2004’s total pay packet in real terms. Workers at Jaguar Land Rover and Nissan will both begin negotiations over new pay packages later this year. Unite has called on the Japanese carmaker to offer “pay and conditions match[ing] their effort and expertise.”
Source: Financial Times