What happened to the 'year of the pay-rise'?

Unemployment is down again, the number of vacancies in job centres is approaching the pre-recession peak, there has never been a greater proportion of the adult population in work.

These are things to celebrate. The downside, and it's a significant one, is that pay growth is so dismal.

2014 was supposed to be the "year of the pay-rise" - the year when wages began to grow faster than prices. In the Spring that narrative appeared sound but it is now pretty evident that the squeeze on living standards continues.

So why aren't companies paying their staff more? The recovery appears robust, confidence appears to be growing. It is both striking and puzzling that pay growth in the private sector (where jobs are being created) is actually weaker than the public sector (where they are being lost).

Plenty of economists freely admit to being confused. One or two have interesting theories: Alan Clarke from Scotiabank believes that although companies are hiring, the jobs they are creating tend to be unskilled and therefore low paid, dragging the average down.

It's possible too that companies aren't being more generous because they don't feel under any pressure to be. Throughout the downturn employees have been grateful simply to be employed, it may well be that in the months to come they become pluck up the courage to knock on the boss's door.

The fact that pay is subdued matters, to the average person who is in work are probably feeling poorer but also to politicians and economists. Remember the election isn't that far away and unless household incomes start rising soon there's every chance that the recovery will start to weaken.