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UK – Use of agency staff keeping automotive salaries down

17 February 2014

A sharp rise in agency staff and temporary contracts at the UK’s 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 an investigation carried out by The Financial Times (FT).

UK factories have seen the production of motor vehicles increase by +45% in the past four years, as the £55 billion industry makes more cars with proportionally fewer workers. Over the same period, average salaries in real terms have risen by just +2.3%, and the wages of the lowest paid 30% have fallen by -7.5%, according to data from the Office of National Statistics.

In contrast, the average salary of a director at one the six largest UK carmakers has seen a +19% pay increase.

Roger Maddison, automotive national officer at Unite, the union, told the FT: “Everybody is taking advantage of weak regulation to hire lower-paid, less permanent workers. 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 closure of plants in Germany, France, Belgium, and Italy.

UK car production topped 1.5 million 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.

However, despite a recent increase in hiring by major manufacturers, only 87,000 people were employed to build motor vehicles last year, according to government data, below the 92,000 in 2007 and well short of the 123,000 workers in 2004.

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. Automotive workers earned a collective £3.6 billion last year, +19% more than in 2009, but a quarter less in real terms compared with 2004.

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