The Government has announced that almost 1.4 million public sector employees will receive a 1% pay rise from next month.
The Treasury said recommendations from a number of pay review bodies had been accepted, sparking anger from unions.
Unison, which represents 450,000 NHS workers including nurses, paramedics, therapists and midwives, said staff face another year of financial hardship.
The union condemned the second successive 1% annual increase as a "squeeze" on pay, which officials warned would leave many health workers and their families struggling to make ends meet.
Official figures released today show that public sector employment has fallen in all regions of England and Wales since the start of the recession - and in particular across the North East.
The Office for National Statistics reported large falls in local government employment between March 2008 and last September, with the biggest being in the North East at 24 percent.
The reduction is likely to be due to cuts in local authority budgets, staff moving off the local authority payroll and schools in England becoming academies, said the ONS.
Claire Williams from Unison says bringing down wage levels of the public sector is not the answer.
A union says it's concerned that plans to regionalise public sector pay will seriously affect the north east economy.
The Chancellor George Osborne is expected to confirm the move in Wednesday's budget. Treasury officials are quoted as saying public sector pay is significantly higher in some areas than the private sector equivalent. They argue changes would encourage investment and recruitment by private firms.
Unison is among the unions which disagrees. North east official Clare Williams says the proposals are 'not fair' and would take money out of an already struggling economy.
A union says the north east would be hit hard by plans to end national pay rates for some public sector workers. George Osborne is expected to announce the change in Wednesday's budget. The move would end national deals.
Instead, local factors such as the cost of living would be taken into account. Treasury officials say it's needed because public sector wages are much higher in some areas than their private sector equivalents and this is discouraging investment.