United Kingdom
Young adult low pay
Key points
- The only data on low pay over time is a series of estimates published by government. Currently, these estimates only provide breakdowns for the age groups 18-21 and 22+, and only for the years from 1998 onwards.
- In 2007, around 1.3 million 18- to 21-year-olds were paid less than £7 per hour. This is two-thirds of all the employees in this age group. It is a much higher proportion than that for older workers.
- Around half of those earning £7 per hour were men and half were women. More generally, the distribution of pay rates is men aged 18 to 21 is similar to that for women.
- Using a relative low pay threshold which rises in line with average earnings and was £7 per hour in 2007, the proportion of 18- to 21-year-olds who are low paid has remained broadly unchanged since at least 1998. In terms of absolute numbers, however, it is somewhat higher than a decade ago, reflecting an increase in the total number of 18- to 21-year-olds who are working.
- Between the ages of 18 and 21, more than half of all full-time employees were paid less than £7 per hour in 2007. This is in sharp contrast to those aged 22 and over.
- In most industrial sectors, at least half of all employees aged 16 to 24 are paid less than £7 per hour. The sectors with the highest proportions are hotels & restaurants (85%) and wholesale & retail (80%).
- Half of all adults aged 16 to 24 earning less than £7 per hour work in hotels & restaurants or wholesale & retail.
- These proportions and shares are both rather different than for older adults - see the indicator on low pay among older adults.
Graph 1: Over time (proportions)
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Graph 2: Over time (numbers)
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Graph 3: By gender
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Graph 4: By age
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Graph 5: Rates by industry
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Graph 6: Shares by industry
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Why this indicator was originally chosen
Low wages disproportionately affect young adults. This age group is also the only one where the average weekly wage fell in the early 1990s. Labour Force Survey figures for Winter 1994/95, as cited in Action on aftercare consortium Too much to young, Barnardo's, 1996, page 23. This indicator tracks the number of 18-to 21-year-olds on low rates of pay, this being the only age group for which low pay statistics are currently available.
Definitions and data sources
The first graph shows the estimated proportion of employees aged 18 to 21 who were paid below an hourly pay threshold that rises in line with average earnings and reaches £7 in 2007. It is therefore £4.82 in 1998, £5.04 in 1999, £5.32 in 2000, £5.57 in 2001, £5.74 in 2002, £5.93 in 2003, £6.17 in 2004, £6.45 in 2005, £6.70 in 2006 and £7.00 in 2007. The data is shown separately for men and women. No data is available for years before 1998 and the available data only distinguishes between the 18-21 and 22+ age groups.
The threshold of £7 per hour has been chosen as being roughly two-thirds of the Great Britain median hourly earnings at the time and is commonly used as a threshold which analysing low pay.
The second graph show the same information but in terms of absolute numbers rather than percentages.
The third graph shows, for the latest year, the estimated pay distribution of the workforce aged 18-21, with the data shown separately for men and women.
The figures in the first three graphs are from published ONS statistics which were themselves derived from a combination of data from the Labour Force Survey (LFS) and Annual Survey of Hours and Earnings (ASHE), with adjustments by the ONS.
The fourth graph shows, for the latest year, the proportions of employees paid less than £7 per hour by age group, with the data shown separately for part-time workers, full-time women and full-time men.
The data source for the fourth graph is the Annual Survey of Hours and Earnings (ASHE) and relates to the United Kingdom. The proportions have been calculated from the hourly rates at each decile using interpolation to estimate the consequent proportion earning less than £7 per hour. Note that this method is less reliable where the proportion is less than 10%.
The fifth graph shows how the proportion of employees aged 16 to 24 earning less than £7 per hour varies by industry sector, with the data shown separately for men and women.
The sixth graph shows the distribution of employees aged 16 to 24 earning less than £7 per hour between industrial sectors.
Some industry sectors have been combined together for presentational purposes. The sectors shown are: manufacturing and other production (A-F); wholesale & retail (industry code G); hotels & restaurants (H); banking, finance and insurance (J-K); public administration, education & health (L-N); and other services (I plus O-Q).
The data source for the fifth and sixth graphs is the Labour Force Survey (equivalent data by age group and industry not being available from the published results of ASHE) and relates to the United Kingdom. The data is for 2007. People whose hourly pay rates cannot be calculated from the survey data have been excluded from the analysis.
Overall adequacy of the indicator: medium. The LFS and ASHE are well-established government surveys, designed to be representative of the population as a whole. However, the ONS methods for combining and adjusting the data are not available for public scrutiny, and the underlying dataset itself is not publicly available.
External links
- See ONS low pay estimates.
- See the Low Pay Commission site and their annual reports on the National Minimum Wage.
Relevant 2007 Public Service Agreements
None directly relevant.
Relevant government policies
The numbers
Graphs 1 and 2
|
Below £7 per hour in 2006 deflated for the average rise in earnings | ||||
|---|---|---|---|---|
| Year | Thousands | Proportion | ||
| Men aged 18 to 21 | Women aged 18 to 21 | Men aged 18 to 21 | Women aged 18 to 21 | |
| 1998 | 520K | 590K | 69% | 74% |
| 1999 | 540K | 610K | 69% | 77% |
| 2000 | 560K | 660K | 72% | 80% |
| 2001 | 610K | 650K | 72% | 76% |
| 2002 | 630K | 650K | 70% | 77% |
| 2003 | 590K | 600K | 66% | 74% |
| 2004 | 610K | 690K | 66% | 73% |
| 2005 | 600K | 660K | 66% | 73% |
| 2006 | 650K | 730K | 68% | 74% |
| 2007 | 600K | 680K | 68% | 74% |
Graph 3
Numbers are as shown on the graph
Graph 4
| Occupation | Full-time men | Full-time women | Part-time |
|---|---|---|---|
| Aged 18-21 | 57% | 60% | 78% |
| Aged 22-29 | 19% | 20% | 53% |
| Aged 30-39 | 9% | 12% | 35% |
| Aged 40-49 | 7% | 16% | 38% |
| Aged 50-59 | 9% | 17% | 40% |
| Aged 60+ | 16% | 20% | 46% |
| All ages | 13% | 18% | 46% |
Graph 5
| Industry | Men | Women | Total |
|---|---|---|---|
| Hotels and restaurants | 37% | 48% | 85% |
| Wholesale & retail | 38% | 41% | 79% |
| Manufacturing and other production | 40% | 12% | 52% |
| Public admin, education & health | 9% | 39% | 48% |
| Banking, finance & insurance | 19% | 21% | 40% |
| Other services | 29% | 34% | 63% |
Graph 6
| Wholesale & retail | 35% |
|---|---|
| Hotels and restaurants | 16% |
| Manufacturing and other production | 15% |
| Public admin, education & health | 11% |
| Banking, finance & insurance | 9% |
| Other services | 13% |