I keep hearing on the radio that commentators are surprised that the UK is enjoying good growth for the first time in years, but that wages are not yet rising. That seems to me to be perfectly logical.
Of course, I didn’t go to college to learn economics so who am I to pontificate when the likes of Robert Peston are puzzled, but things seem to me to be following a perfectly natural course.
We have all been treading water for a long time. Many of our partners overseas are still finding things tough. In the UK we are a long way from being out of the rough but at least it does seem as though we might at least be able to see the fairway if not quite reach it with a pitching wedge. But when money is tight we all tighten our belts a little, we stop doing things, we ask the R&D department not to have any bright ideas not because we are in trouble but just because we are not certain what the future holds.
When there is a glimmer of hope, however fleeting, we relax a little. Rather than say no to everything, we start to think, well maybe we should. Maybe we should let that old van go; maybe we should take on some part-time help; maybe we should spend a little more on advertising; or maybe we should update our website to something that works a bit harder for us. What we don’t immediately think is maybe we should pay our staff more.
Of course we should pay our staff more, just as soon as we possibly can because they are the people who have kept us going during the dark days. But as sensible business owners we all know that it is our primary duty to secure the future of the business for without that, everyone’s out of a job. Employees who are business savvy, know that too. They are prepared to wait. Not for ever, but a while at least.
The fact that the UK wage rates are not racing ahead I see as a testimony to the modern British mentality. Unlike in the past, people now seem to understand that you can only get higher wages after you have earned higher profits – not before. With that comes a responsibility on behalf of the bosses: to respect that trust, and not exploit it. Steve