Number in low-paid jobs hits record low but wages suffer

By:

Add as a preferred source on Google
Number in low-paid jobs hits record low but wages suffer
An employee of The Morgan Motor Company works to produce leather seat covers in the trim shop of the car firm's factory in Malvern, southwest of Birmingham, central England on August 13, 2019. - The Morgan Motor Company was established in 1909 by H.F.S Morgan and have been manufacturing quintessentially British vehicles at their Pickersleigh Road factory in Malvern, UK, for over 105 years. Each Morgan is hand-built using traditional craftsmanship skills from three core elements: ash wood, aluminium and leather. The Morgan family retain a shareholding of the company, alongside majority shareholders Investindustrial, an investment company that also has Aston Martin in its portfolio. Morgan produce just 800 cars per year from three ranges: the 3 Wheeler, Classic and Plus Six, with prices ranging from around 40,000 GBP to over 78,000 GBP. (Photo by OLI SCARFF / AFP) (Photo credit should read OLI SCARFF/AFP/Getty Images)

The proportion of people in low-paid jobs fell to its lowest level on record last year, official figures showed today, thanks in large part to a rising minimum wage.

Read more: UK women earn £263,000 less than men over working lives

Nonetheless, when adjusted for inflation median pay was almost three per cent lower than before the financial crisis, the Office for National Statistics (ONS) said.

The fraction of employees in low-paid jobs – those which take in below two-thirds of median hourly earnings – fell to 16.2 per cent in the financial year to April 2019. This was the lowest since ONS figures began in 1997.

The drop in low-paid work was mostly due to recent rises in the so-called national living wage, which climbed to £7.83 an hour for those over 25 in April 2018. It now stands at £8.21 an hour.

Nye Cominetti, economic analyst at the Resolution Foundation think tank, said that as a result of the wage increase, the earnings of Britain’s worst-paid “grew at least four times as fast as for Britain’s top earners”.

Nonetheless, he said a “disastrous decade” meant average pay stayed stubbornly below the level seen before the financial crisis.

Despite rising over the course of the year, median weekly earnings were still 2.9 per cent, or £18, lower than the 2008 peak of £603 in 2019 prices.

Institute for Fiscal Studies senior research economist Jonathan Cribb said: “The level of earnings for employees are the single most important determinant of household incomes and material living standard for most people in the UK. That is why no real growth in 11 years for average earnings is such an important trend.

“Beneath this average, you have some groups doing much worse: men (particularly those with low weekly earnings), those in their 30s, and Londoners.

Read more: Sajid Javid promises national living wage increase to £10.50

“In contrast, earnings for women (particularly lower-paid who have been most affected by the rising minimum wage) are significantly above pre-crisis levels, though men are still much better paid than women on average.”

(Image credit: Getty)