Wage share is wages and salaries as a share of GDP. Special contributions capture one-off payments by firms which we have assumed represent one-off back payments to fill pension deficits. Chart 13: Typical wage growth of ‘stickers’ and ‘twisters’ Median annual growth (%)  12  "Twister" 10 8 6  "Sticker" 4 2  1994  1996  1998  2000  2002  2004  2006  2008  2010  2012  2014  2016  0 2018  Sources: ONS and Bank calculations, Note: “Twister” line shown includes job moves within firms, but results are near identical if only job moves between firms were shown. 24  All speeches are available online at www.bankofengland.co.uk/speeches  24  Chart 14: Voluntary job-to-job flow rate Percent of those employed in previous period 2.0%  1.5%  1.0%  0.5%  0.0% 2002  2004  2006  2008  2010  2012  2014  2016  2018  Source: ONS and Bank calculations. Notes: Dashed line shows average over time period in chart. Chart 15: Two empirical Philips curves – “stickers” and “twisters” “Sticker”  “Twister”  25  30  25  Wage grwoth (%)  Wage grwoth (%)  20  15  10  5  20  15  10  5  0  0 0  5  10  15  0  Unemployment (%)  5  10  15  Unemployment (%)  Sources: ONS and Bank calculations.
Rolling regressions suggest the effects of unionisation on pay were largest during this period. If we look at the sectoral level, similar effects are seen. Sectors of the UK economy with higher levels of unionisation have seen smaller falls in their labour shares (Chart 20). Over the past few decades, a sector like administration and support activities with under 10% unionisation rates has seen its labour share decline, while a sector like education with a unionisation rate close to 50% has seen its labour share rise. (c)  Automation  A third factor potentially affecting the pay power of workers is the degree of automation in the workplace. The easier and cheaper it is to replace human with machine, the lower is likely to be the wage bargaining power of workers relative to companies. Increased automation and the dawn of a Fourth Industrial Revolution could, then, result in slower pay growth and workers receiving a smaller slice of the income pie. 19  Recent research has confirmed that intuition. The IMF has found a significantly negative effect of automation on labour’s share. 20  Acemoglu and Restrepo (2018) look at the influence of multi-purpose industrial robots  on pay growth across different sectors of the US economy. They find that one extra robot per thousand workers lowers wages by 0.25-0.5%. At 71 robots per 10,000 employees, the UK’s degree of robot automation lies well below France (127), Spain (150), the US (170) and Germany (301) (Chart 21).