1. Annual Survey of Hours and Earnings
2016 release seminar
26 October 2016

2. Agenda
10.30 Introduction (Nick Palmer, ONS) Annual Survey of Hours and Earnings results Analysis of the distribution of earnings across the UK using ASHE data Closing remarks

3. ASHE 2016
Provisional results from the 2016 Annual Survey of Hours and Earnings
James Scruton, Office for National Statistics

4. ASHE 2016 What is ASHE? Published today
The ONS’s most detailed and comprehensive source of earnings information
The official measure of the gender pay gap
The official measure of the number of low paid jobs
Published today
2016 provisional and 2015 revised results
2016 Low Pay results
2016 ASHE captures some of the early impact of
the National Living Wage on estimates of earnings

5. Average Earnings

6. +2.2% (£527 in 2015) +1.9% (compared with 2015) Weekly earnings
Median gross earnings for full-time employees
Current prices £539
+2.2% (£527 in 2015)
Constant (2016) prices
+1.9% (compared with 2015)

7. Weekly earnings
Median gross earnings for full-time employees

8. Continuous employment:
Annual percentage change in median full-time gross weekly earnings for all employees and those in continuous employment
4.6%
2.2%

9. £28,200 +2.2% (£27,600 in 2015) Annual earnings
Median full-time gross annual earnings
£28, % (£27,600 in 2015)

10. Weekly earnings for full-time and part-time employees Median gross weekly earnings

11. Distribution of Earnings

12. +4.4% (£296 in 2015) +2.2% (from £1,035 in 2015) Earnings distribution
Median gross weekly earnings for full-time employees
Bottom 10% earn less than £309
+4.4% (£296 in 2015)
Top 10% earn more than £1,058
+2.2% (from £1,035 in 2015)

13. Earnings distribution
Median gross weekly earnings for full-time employees

14. Gender pay differences

15. Factors affecting the gender pay gap
Women are more likely to work part-time compared to men
More women tend to work in lower paid occupations compared to men
The gender pay gap increases significantly between the ages of 30 and 40

16. Gender pay gap
Median gross hourly earnings (excluding overtime)
Full-time 9.4%
-0.2 p.p. (9.6% in 2015)
Part-time -6.0%
+0.8 p.p. (-6.8% in 2015)
All employees 18.1%
-1.2 p.p. (19.3% in 2015)

17. Gender pay gap
Median gross hourly earnings excluding overtime

18. Gender pay gap by hours worked
Median gross hourly earnings excluding overtime

19. The gender pay gap across the pay distribution
Median gross hourly earnings excluding overtime

20. Public and private sector pay

21. +3.4% (£500 in 2015) +0.7% (£590 in 2015) Public and private sector
Median gross weekly earnings for full-time employees
Private sector £517
+3.4% (£500 in 2015)
Public sector £594
+0.7% (£590 in 2015)

22. Public and private sector
Median gross weekly earnings for full-time employees (private sector as a proportion of public sector)

23. Earnings by region and occupation

24. Regional earnings by Region
Median full-time gross weekly earnings

25. Growth in regional earnings since 2015
Median full-time gross weekly earnings

26. Earnings by occupation Median full-time gross weekly earnings
£539
£798
£726
£594
£498
£468
£423
£356
£355
£353

27. Growth in earnings by occupation since 2015 Median full-time gross weekly earnings

28. Components of pay and paid hours

29. Components of pay
Proportion of mean gross weekly earnings

30. Hours worked Mean full-time weekly paid hours
Males

31. Low paid jobs

32. Interpreting the low pay estimates
The low pay estimates are not a measure of non-compliance with the NMW/NLW
The 2016 low pay results are not comparable with earlier years due to the timing of the introduction of the NLW
If the employee’s (25+) pay period started before the 1 April then they did not need to be paid the NLW until the following pay period
These cases have not been classed as low pay as long as the employee was being paid above the existing NMW rate (£6.70)

33. Measuring low pay for those 25 years and older in 2016

34. 362k jobs below NMW/NLW 23k jobs 29k jobs 306k jobs
Jobs paid below National Minimum/Living Wage, 2016
362k jobs below NMW/NLW
or 1.3% of UK employee jobs
18-20 yrs
23k jobs
or 2.1% of total
21-24
29k jobs
or 1.4% of total
25+ yrs
306k jobs
or 1.3% of total

35. Number and percentage of jobs paid below the National Minimum/Living Wage by low paid industry groups, UK, April 2016

36. ?

37. Analysis of the distribution of earnings across the UK using ASHE 2016
official sensitive
Analysis of the distribution of earnings across the UK using ASHE 2016
Dr. Amina Syed
Daniel Ollerenshaw

38. Distribution of earnings and its growth:
Table of contents
Distribution of earnings and its growth:
over time
by region
by gender
by working pattern
by gender for full-time and part-time workers
by skill group
by age

39. official sensitive
Distribution of earnings over time

40. Distribution of earnings over time
The UK’s earnings distribution has shifted over the years from a relatively smooth, positively skewed distribution to a sharply-edged distribution, with a spike at around £7.20 per hour – the prevailing adult National Living Wage (NLW) in April 2016.

41. Growth in hourly earnings

42. Cumulative distribution of earnings growth

43. Growth in hourly earnings
11% of people experienced a nominal pay freeze in the year to April 2016.
There is a noticeable bump at 10.8% earning growth representing a shift from the £6.50 an hour National Minimum Wage (NMW) to the £7.20 an hour National Living Wage (NLW).
Median of the growth distribution is around 2.5% for 2016.

44. Regional earnings distribution
official sensitive
Regional earnings distribution

45. Regional earnings distribution
London has the lowest proportion of people on the NLW.
London has a higher proportion of people on higher pay brackets (£30 plus).
Northern Ireland has the highest proportion of people receiving the NLW.

46. Growth in hourly earnings by region
official sensitive
Growth in hourly earnings by region

47. Growth in hourly earnings by region
For most regions the biggest peak is clustered around zero growth with around 10%-13% of workers receiving no wage increase.
Northern Ireland showed the biggest bump at 10.8% growth which represents a shift from the NMW to the NLW.
Scotland experienced a higher share of pay increases at around 2% than any other region.

48. Earnings distribution by gender

49. Earnings distribution by gender
More men tend to be in higher pay brackets.
The proportion of women closer to the NLW is higher than men.

50. Growth in hourly earnings by gender

51. Growth in hourly earnings by gender
The most common nominal pay rise was around zero percent for both men and women – accounting for around 12% of men and 11% of women.
A greater share of women (3.5%) received a pay growth of around 10.8% in 2016 than men (2.8%)- representing a shift from the NMW to the NLW.

52. Earnings distribution by working pattern

53. Earnings distribution by working pattern
More part-time workers earn an hourly wage close to the NLW than full-time workers in 2016.
Greater numbers of people earning wages more than £10.50 per hour are working full-time.

54. Growth in hourly earnings by working pattern

55. Cumulative chart of growth in hourly earnings by working pattern

56. Growth in hourly earnings by working pattern
A greater share of part-time workers compared to full-time workers experienced nominal hourly earnings growth between 10% and 11% - which reflects the switch from the NMW to the NLW.
The most common rate of growth of nominal hourly earnings for both full-time and part-time workers is around zero percent.

57. Earnings distribution for full-time and part-time workers by gender

58. Earnings distribution for full-time and part-time workers by gender

59. Earnings distribution for full-time and part-time workers by gender
A greater share of women who work full-time earn wages close to the NLW compared to men in 2016.
A greater share of men who work part-time earn wages close to the NLW than women.
The earnings distribution for both genders after controlling for working pattern are then fairly closely matched at higher wage rates.

60. Growth in hourly earnings for full-time workers by gender

61. Growth in hourly earnings for part-time workers by gender

62. Growth in hourly earnings by working pattern for each gender
A greater share of men working part-time compared to women have seen the 10-11% pay rise- reflecting a switch from NMW to NLW.
This is likely to reflect the smaller base of men who are part-time.

63. Skill groups 4 groups: low, lower-mid, upper-mid, upper
Based on SOC2010
Skill group
Proportion of full-time workers, ASHE (approx.)
Proportion of part-time workers, ASHE (approx.)
Typical occupations
1 (low) 8%
20%
Labourers (e.g. agriculture, construction), cleaners & basic admin workers
2 (lower-mid)
30%
51%
Secretaries, carers, hairdressers, cashiers, machine operatives, transport drivers
3 (upper-mid)
29%
10%
Skilled trade workers, associate professionals and technical occupations
4 (upper)
34%
18%
Professionals (e.g. teachers, doctors, scientists, engineers, managers, directors)
Skill is defined in terms of duration of training/experience needed to perform the job

64. official sensitive
Full-time workers

65. official sensitive
Full-time workers

66. Full-time workers

67. Full-time workers

68. Full-time workers

69. Full-time workers

70. Full-time workers

71. Full-time workers

72. Full-time workers

73. Full-time workers

74. Full-time workers

75. Full-time workers

76. Full-time workers

77. Full-time workers

78. Full-time workers

79. Main points: full-time workers
official sensitive
Main points: full-time workers
Increasing compression at the minimum wage, particularly for ‘low’ skill group
Upper and upper-mid distributions have shifted to the right, but no apparent change in the overall shape of the distributions

80. official sensitive
Part-time workers

81. Part-time workers

82. Part-time workers

83. Part-time workers

84. Part-time workers

85. Part-time workers

86. Part-time workers

87. Part-time workers

88. Part-time workers

89. Part-time workers

90. Part-time workers

91. Part-time workers

92. Part-time workers

93. Part-time workers

94. Part-time workers

95. Main points: part-time workers
official sensitive
Main points: part-time workers
Large clustering of ‘low’ skill part-time workers at NLW/NMW in last few years
Evidence of some minimum wage compression for lower-mid and upper-mid groups (relative to full-time workers)
‘Spike’ declined between 2015 and 2016 – could be because previous NMW applied for those aged 21+ while NLW applies for those aged 25+

96. Age bands 4 groups: 16-24, 25-34, 35-49, 50-64 Age band % of FT (2016)
% of PT
(2016)
(2003)
16-24
10.0
11.6
19.1
20.7
25-34
26.3
25.6
17.8
16.5
35-49
36.6
40.0
31.0
35.9
50-64
25.9
22.4
26.9
23.7
65+
1.2
0.5
5.3
3.3
Total
100

97. Full-time workers

98. Full-time workers

99. official sensitive
Part-time workers

100. official sensitive
Part-time workers

101. Main points: age bands official sensitive
Younger workers’ distribution is to the left of other age bands (which are fairly closely aligned)
Some evidence that young people are being paid NLW (for both full-time and part-time).
Seen by the ‘splitting’ of distribution between 2015 and 2016

102. official sensitive
Hourly earnings growth by skill group, cumulative percentage frequency, 2016

103. official sensitive
Hourly earnings growth by age group, cumulative percentage frequency, 2016

104. To summarise… official sensitive
In 2016, there was a continuation of the trend for a growing concentration of pay at the bottom of the UK’s earnings distribution.
London has the least number of people on the NLW and Northern Ireland has the most number of people on the NLW.
A greater share of women are earning around the NLW in 2016 compared to men.
In 2016, a greater share of part-time workers experienced hourly pay growth of around 11% (the change from the old NMW to the NLW) compared to full-time workers.
Tentative evidence of young people receiving the NLW, even though it is not a legal requirement.
Those moving from the previous NMW to the NLW are almost exclusively in the ‘low’ skill group, but are evenly distributed across age bands.