The recession will claim 600,000 jobs next year, making 2009 the worst year for job losses in two decades. Overall, job losses from the recession are expected to top one million, taking the total out of work to three million in 2010, employers’ groups say today.

Fears for mounting job losses from the Chartered Institute of Personnel and Development (CIPD) come as the British Chambers of Commerce (BCC) is calling for a freeze in the level of the minimum wage because it says that business cannot afford any more costs. A survey by the CIPD also found that pay expectations among employees had slumped, with many fearing pay freezes and a minority expecting pay cuts.

John Philpott, the chief economist of the CIPD, said: “This time last year, in the face of some scepticism, the CIPD warned that 2008 would be the UK’s worst year for jobs in a decade. It was. But, in retrospect, it will be seen as merely the slow-motion prelude to what will be the worst year for jobs in almost two decades.”

He added that human resources in many businesses would feel more like “ ER or Casualty” as HR departments tried to deal with the impact of job losses. On the expected contraction in pay awards, the CIPD said that employers would have to find other ways to motivate employees, including nonfinancial rewards.

Several big-name companies have asked workers to take pay cuts, and they have achieved mixed results. JCB, the maker of earth-moving equipment, cut pay to some workers in return for limiting redundancies; however, unions have rejected proposals for pay cuts from Corus and Vauxhall. The BCC is pressing for a halt to the annual rises in the national minimum wage to help businesses to cope with the downturn. The minimum wage is recommended by the Low Pay Commission in March and implemented by the Government in October. David Frost, the director-general of the BCC, said that although the organisation did not oppose a rise when the economy was strong, “when jobs are being lost daily and a recession is in full swing, it makes no sense to increase the national minimum wage”.

He said: “Most businesses are prioritising survival at the moment. A rise in the minimum wage would not help firms to hold on to staff and would simply add to unemployment.”

Richard Lambert, the Director-General of the CBI, said that concern over the state of the economy next year highlighted the need for politicians to set out industrial priorities. He said: “Politicians of every strip are beginning to sketch out big and challenging ideas about a more activist approach to industrial policy in the years ahead. It’s going to be very important for business to join in this debate and to set out its own ideas of the best way forward.”

Meanwhile, one of the biggest unions highlighted regional pay disparities after analysing precredit crunch data. The GMB found that employees in London earned the most in the country, with an average of £46,000. The average in the City of London was £82,000, compared with £31,300 nationwide. Workers in the North East earned the lowest average pay, £25,551. Parts of South Wales also ranked low, as did areas in the North West, such as Blackpool and Rochdale.

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