United Kingdom

Numbers in low pay

Key points

top

Graph 1: Over time (proportions)

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Graph 2: Over time (numbers)

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Graph 3: By gender

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Graph 4: By age

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Graph 5: By occupation

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Graph 6: Shares by gender

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Graph 7: Shares by age

View Graph as PDF (resizeable)   Right click to save large version of Graph as PNG

top

Why this indicator was originally chosen

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.

top

Definitions and data sources

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.

top

External links

top

Relevant 2007 Public Service Agreements

None directly relevant.

top

The numbers

Graphs 1 and 2

Year Below 7 per hour in 2010 deflated for the average rise in earnings
Millions Proportion
Men aged 22 to retirement Women aged 22 to retirement Men aged 22 to retirement Women aged 22 to retirement
1998 1.2M 2.9M 11% 28%
1999 1.3M 3.1M 12% 29%
2000 1.3M 3.1M 12% 29%
2001 1.4M 3.3M 12% 30%
2002 1.3M 3.3M 12% 29%
2003 1.2M 2.9M 11% 26%
2004 1.1M 2.7M 10% 24%
2005 1.2M 2.5M 10% 22%
2006 1.2M 2.5M 10% 22%
20071.2M 2.5M 10% 22%
20081.3M 2.6M 11% 22%
20091.2M 2.5M 10% 21%
20101.3M 2.4M 11% 20%

Graph 3

Numbers are as shown on the graph

Graph 4

Age groupFull-time men Full-time women Part-time
Aged 18-21 49% 52% 72%
Aged 22-29 15% 15% 45%
Aged 30-39 5% 7% 28%
Aged 40-49 3% 10% 29%
Aged 50-59 5% 10% 29%
Aged 60+ 10% 15% 32%
All ages 9% 12% 37%

Graph 5

Occupation Full-time men Full-time women Part-time
Sales and customer service 30% 39% 69%
Elementary 30% 50% 70%
Process, plant and machine operatives 13% 39% 43%
Skilled trades 8% 30% 43%
Personal service 16% 25% 30%
Administrative and secretarial 7% 8% 19%
All occupations 9% 12% 37%

Graph 6

Group Number Proportion
Full-time men 800K 20%
Full-time women 800K 21%
Part-time men 600K 15%
Part-time women 1,800K 44%

Graph 7

Group Numbers Proportion
Full-time Aged 18-21 300K 8%
Aged 22-29 500K 11%
Aged 30-39 300K 6%
Aged 40-49 300K 7%
Aged 50+ 400K 9%
Part-time Aged 18-21 500K 13%
Aged 22-29 400K 9%
Aged 30-39 400K 9%
Aged 40-49 500K 12%
Aged 50+ 600K 15%

top