Numbers in low pay
- 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+.
- In 2010, around 3½ million employees aged 22 to retirement were paid less than £7 per hour. Two-thirds were women and one-third were men.
- In term of proportions, one in five female employees - and one in ten male employees - were paid less than £7 per hour. Similar differences between men and women exist if a lower low pay threshold is used.
- The majority (three-fifths) those who paid less than £7 an hour in 2010 were part-time employees and two-fifths were full-time employees. Among the low-paid full-timers, there were as many low-paid men as low-paid women. By contrast, among the low-paid part-timers, women predominate. So, the immediate reason why there are so many more low-paid women than low-paid men is that there are so many more low-paid part-time female workers than low-paid part-time male workers.
- At all ages, at least 30% of part-time employees were paid less than £7 per hour in 2010. Except for the 18-21 age group, the proportion of full-time employees paid less than £7 per hour was much lower than this.
- Combining part- and full-timers, low-paid work is not something that is concentrated among particular age groups but is, instead, that affects a significant proportion of workers at every age. Thus, around one fifth of low-paid workers on adult rates are aged 18 to 21, a further fifth are aged under 30, almost a fifth are in their 30s, a fifth are in their 40s and just over a fifth are aged 50 or above.
- In total, almost two-fifths of all part-time workers were paid less than £7 per hour in 2010. In two areas of occupation - elementary and sales & customer service - two-thirds were paid less than £7 per hour.
- In all occupations, the proportion of men paid less than £7 per hour was lower than that for women. So, gender pay inequalities are not just because women work in more lowly occupations. However, in two occupations - elementary and sales & customer service - a substantial proportion of full-time men (around a third) were also paid less £7 per hour in 2010.
- Using a relative low pay threshold which rises in line with average earnings and was £7 per hour in 2010, the number of employees aged 22 to retirement who were low paid fell by almost a million between 2002 and 2005 but has remained broadly unchanged since then. Throughout the last decade, a much larger proportion of women than men have been low paid.
- The proportions in low pay, shares and gender inequalities are all rather different than for younger adults - see the indicator on low pay among young adults.
- The detailed occupations with the highest prevalence of low pay include sales assistants, retail cashiers, kitchen staff, waiters, bar staff, cleaners and shelf fillers.
- See the indicator on the location of low pay.
Even with the introduction of the National Minimum Wage, the pay of some workers is not, by itself, sufficient to take their families out of low income.
The last twenty years has seen a gap open up between average earnings and the earnings of the lowest paid. The working conditions and the pay of some workers leave them only marginally better off than people without work, particularly if they are single and childless and therefore ineligible for in-work tax credits. Low wages are now a considerable determinant of family poverty in Britain, especially where a woman's earnings are an important part of household income, or the only source of it. Women are particularly over represented amongst low-paid part-timers.
The first graph shows the estimated proportion of employees aged 22 to retirement who were paid below an hourly pay threshold that rises in line with average earnings and reaches £7 in the latest year. So, for example, average earnings rose by 42% between 2000 and 2010, and the 2000 threshold used is therefore £4.94 (£7/1.42). The data is shown separately for men and women. The available data only distinguishes between the 18-21 and 22+ age groups.
£7 per hour is roughly two-thirds of UK median hourly earnings and is commonly used as a threshold when 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 22 to retirement, 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 the Annual Survey of Hours and Earnings (ASHE), with adjustments by the ONS. The data source for the earnings deflators is the ONS Average Earnings Index, using the series which is seasonally adjusted (LNMQ). Average earnings jumped around a lot in early 2009 so it does actually matter precisely which 2009 earnings index is used. The April index has been used, partly because the ASHE survey was conducted in April and partly because it was after most of the jumping around.
The fourth and fifth graphs show, for the latest year, the proportion of employees paid less than £7 per hour, with the data shown separately for part-time workers, full-time women and full-time men. The fourth graph shows this data by age group and the fifth graph shows it by occupation.
Management and professional occupations are not shown in the fifth graph as the proportions paid less than £7 are very small (less than 10%). Note that the major occupations under the title 'personal service' are related to healthcare and childcare services. Those under 'elementary' relate to routine occupations.
The sixth and seventh graphs show, for the latest year, the distribution of employees paid less than £7 per hour. In the sixth graph, the data is divided by male/female and full-time/part-time. In the seventh graph, the data is show by age group and full-time/part-time.
The data source for the fourth to seventh graphs 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 much less reliable where the proportion is less than 10%.
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.
- For a discussion of the relationship between low pay and income poverty, see the 2006 report by the New Policy Institute and the Bevan Foundation entitled Dreaming of £250 a week: a scoping study of in-work poverty in Wales and the 2004 Joseph Rowntree Foundation report entitled Low pay, household resources and poverty.
- For a discussion of gender inequalities in pay, see the report for the Equal Opportunities Commission entitled Undervaluing women's work (2007), the London School of Economics' paper entitled The gender gap in early career wage growth (2005), and the reports for the Women and Equality Unit entitled The part-time pay penalty (2005) and The impact of women's position in the labour market on pay and the implications and the implications for UK productivity (2002).
- See ONS low pay estimates.
- See the Low Pay Commission site and their annual reports on the National Minimum Wage.
None directly relevant.
Graphs 1 and 2
|Year||Below £7 per hour in 2010 deflated for the average rise in earnings|
|Men aged 22 to retirement||Women aged 22 to retirement||Men aged 22 to retirement||Women aged 22 to retirement|
Numbers are as shown on the graph
|Age group||Full-time men||Full-time women||Part-time|
|Occupation||Full-time men||Full-time women||Part-time|
|Sales and customer service||30%||39%||69%|
|Process, plant and machine operatives||13%||39%||43%|
|Administrative and secretarial||7%||8%||19%|