If we strip out back payments made by firms to fill pension deficits, the labour share shows greater signs of falling, if only gradually, over time (Chart 12). 8 9 10  IMF (2017). IMF (2017). IMF (2017). 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  A more stripped-down measure of the labour share, which better tracks workers’ purchasing power, is wages and salaries (Chart 12). That measure has fallen by around 1 percentage point since 1990. This picture is more striking still if we look at different cohorts. For workers aged over 55, their share of income has doubled from 4% in the early 1990s to 8% today. For workers aged 16-34, their wage share has fallen from 15% to 12% over the same period. The “lost decade” for young people has been particularly pronounced. Finally, aggregate movements in the labour share can obscure important pay dynamics at the sectoral level. Different sectors of the economy are affected to differing degrees by changes in the form of employment, technology, unionisation and company concentration. As I discuss below, these sectoral data provide a clearer picture of the significant impact of slow-moving structural factors on workers’ pay power. (a)  Job Market Flows  The quickest way to secure a pay rise is by moving job. That is quite sobering if, like me, you have never moved job.
With workers fearful of unemployment – and employers having less need to attract workers given the large pool of unemployed – voluntary job moves plummeted, falling from around 1% of the working population pre-crisis to a low of around 0.5% in 2009. As the economy and jobs market has recovered, and job insecurity has fallen, more people have voluntarily moved jobs to secure a higher wage. Job-to-job flows today are back to their pre-crisis averages. In this tightening market, the pay growth of “twisters” has picked up markedly, from a little under 4% in the  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  aftermath of the crisis to over 7% now. 11  Through the direct (batting average) channel, this has in turn  boosted aggregate pay growth. More surprising, however, is how little impact strong employment has had on those not moving job. Wage growth for “stickers” has flat-lined at around 2%. Despite a tightening labour market, companies have so far not felt compelled to pay-up to any significant degree to retain workers. The indirect, or behavioural, channel for pay pressures has largely been missing during the recent jobs recovery. This may be a sign that stickers’ pay is behaving differently than in the past. Chart 15 plots two empirical Phillips curves – one for twisters, the other for stickers. The twisters’ Phillips curve is behaving relatively similarly to the past, with pay broadly as expected given the tightness in the jobs market.