Skip to main content
Back to Main Site Resolution Foundation

The Resolution Foundation Earnings Outlook

A look beyond the headline data on the forces behind current developments in pay, how the fruits are shared, and the short- and longer-term drivers of earnings growth

i Click on an indicator below to see interactive breakdowns

+ Open

What's happened:

The earnings breakdown

Median employee earnings

Real pay growth was strong in 2016 as a whole though, as our Spotlight (back page) highlights, this period of strong growth may now be coming to an end.

All worker average earnings

Strong self-employed earnings growth in 2014-15 narrowed the gap between the employee average and the all worker measure, with the estimated gap staying the same since then.

Earnings decomposition

The compositional effect of a changing workforce on average weekly pay has risen, with occupational mix and qualification levels remaining the most important factors.

Pay rises

The typical real hourly pay change for employees staying in work over a year (both job stayers and job changers) has remained stable over the past year.

Earnings inequality

Hourly pay inequality between both the upper- and lower-middle (r75:25) and the top and bottom (r90:10) has fallen sharply, in part reflecting the new National Living Wage.

+ Open

What’s around the corner:

Pay pressures and slack

Unemployment by duration

The unemployment rate has fallen to 4.8%, just above its post-2000 low (4.7%). Long-term unemployment (6 months+) is back to pre-crisis levels but above its low-point.


Underemployment (net hours desired by those in work as well as the unemployed) has continued to fall but remains 33% above its post-2000 low.

Job-to-job moves

Job-to-job moves, which are a key mechanism of pay progression and can reflect worker confidence, have flattened. They remain 44% below their post-2000 peak.

Migrant job entry

Employment from abroad expands labour supply, dampening pay’s sensitivity to falls in domestic slack. The share of job entries made up by migrants has continued to grow.

+ Open

What’s in the pipeline:

Long-term labour market health & efficiency

Workforce participation

Boosting participation is key to full employment (although it can constrain pay growth in the short term). The 18-69 participation rate has risen to another new high of 75.2%.

Labour productivity

Labour productivity is the main long-term driver of real pay. Provisional Q4 calculations show a much needed rise in year-on-year growth, but still well below the pre-crisis norm.

Training intensity

Training can boost individual productivity and may reflect employer confidence. ‘Off-the-job’ training rates have been on a long-term downward path but stabilised in 2016.

Graduates in non-graduate roles

Grads in non-grad roles reflect mismatches between qualifications and jobs, and may constrain productivity. The rate has risen over time but been stable over the past year.

PDF Briefing

Download (500Kb)

RF’s quarterly earnings outlook four page briefing paper.

Read past briefings

PDF Scorecard

Download (128Kb)


Public sector pay in decline as spending restraints and inflation bite

The public sector in particular faces low nominal pay growth as a matter of policy. Together with rising inflation, this means that real public sector pay has likely now started falling – bringing to an end a short-lived recovery from the financial crisis – and that it will continue to fall for some time.

Read More

All Data Spreadsheet

Download (496Kb)