Northern Ireland’s Employee Earnings Drop by £28 Amid Rising Unemployment

Recent labour market figures reveal that the average employee in Northern Ireland experienced a decline in earnings, with median monthly pay dropping by £28 to £2,344 in June 2025. This drop coincides with an uptick in unemployment, raising concerns among economic experts and labour leaders about the region’s economic stability.

According to the Northern Ireland Statistics and Research Agency (NISRA), the unemployment rate increased to 2.1% for the quarter ending May 2025, representing a significant rise of 0.6%. This figure is crucial as it suggests a shift in the labour market dynamics. There were 809,200 employees registered on HMRC PAYE during June, indicating a stable workforce despite the dip in earnings.

Economic Activity and Redundancies

In June, the total number of hours worked reached 30.2 million, marking a 4.2% increase from the previous quarter and a 2.9% rise from the same time last year. However, the economic inactivity rate rose to 26.3%, a 0.4% increase over the past year. This rate reflects individuals aged 16 to 64 who are neither working nor seeking employment, highlighting a potential issue in job availability.

The month also saw 300 redundancies, contributing to a total of 2,160 redundancies over the past year. This figure is a notable decrease from the previous year’s total of 2,560 redundancies. In addition, there were 210 proposed redundancies in June, bringing the annual total to 3,030, which is nearly 5% higher than the previous year’s total of 2,890.

Inflation and Employment Pressure

With 38,500 individuals on the claimant count, including those receiving jobseeker’s allowance or unemployed recipients of universal credit, this represents 3.9% of the workforce. The current claimant count is 28.8% higher than the levels recorded before the pandemic in March 2020.

The worsening economic landscape is compounded by an unexpected increase in the Consumer Price Index (CPI) inflation rate, which rose to 3.6% in June, up from 3.4%. Mark McAllister, Chief Executive of the Labour Relations Agency, commented on the implications of these figures, noting that the combination of rising inflation and unemployment could lead to increased tensions during upcoming pay negotiations.

“This makes a bad combination, especially with pending pay negotiations and the potential for pay-related disputes,” McAllister stated. He expressed concern over the rising number of redundancies compared to last year, indicating potential instability in the job market.

Employers may face challenges meeting wage demands as employees grapple with higher living costs. Jenny Rankin, an associate and employment expert at DWF Law in Belfast, provided further insight into the situation. “The latest labour market figures for Northern Ireland show a mixed picture against a difficult economic backdrop. Strength in formal employment and wage growth are both positive indicators, but there are signs of cooling in the market,” she explained.

As living expenses continue to rise, Rankin warns that employees may increasingly seek better-paying opportunities if employers cannot accommodate their wage expectations. This shift could lead to further changes in the job market, reflecting the ongoing struggle between rising costs and earnings in Northern Ireland.

Overall, these figures paint a complex picture of Northern Ireland’s labour market, where stable employment exists alongside significant challenges related to income and economic activity. With further scrutiny on policies like the Universal Credit Bill expected in the House of Lords, the future of employment and wage growth in the region remains uncertain.