Last week’s row over pay at the BBC has rumbled on through the weekend, and put the gender pay gap back at the top of the news agenda. With the gender pay gap still over 10 per cent, and unlikely to end any time soon given current trends, it’s good that this topic is leading the headlines.
But while pay at the top is important, so too is pay at the bottom. Which is why we should be just as concerned about the findings of the lesser publicised Apprenticeship Pay Survey that was came out later that same day.
This long-awaited report, based on a survey of 9,442 apprentices across Britain in July 2016, came as something of a surprise late last Wednesday. Just hours beforehand, we had lamented the lack of up-to-date pay figures. Given that it found increasing under-payment of the National Minimum Wage, maybe ‘bad news Wednesday’ wasn’t such bad timing (for some) after all.
The report did feature some good news. In England, median basic hourly pay for apprentices at Level 2 and 3 (equivalent to GCSEs and A-Levels, respectively) rose from £6.31 in 2014 to £6.70 in 2016, representing a real-terms increase of 5%. And while pay naturally varies by sector – (largely male) apprentices working in management had a median basic hourly pay rate of £8.75, compared to £3.34 for (almost entirely female) hairdressing apprentices – nearly all sectors saw a real-terms rise in apprenticeship pay.
However, the report also features a very significant cause for concern: the number and proportion of apprentices being paid below the National Minimum Wage (NMW), which rose from 15 per cent of Level 2 & 3 apprentices in England in 2014, to 18% in 2016.
Minimum requirements on apprentice pay varies by both their age and the number of the years they’ve spent in their apprenticeship: when this survey was conducted in July 2016, apprentices age 16-18, or in the first year of their apprenticeship were entitled to a minimum hourly rate of £3.30. All other apprentices are entitled to the NMW for their age (£5.30 for those 18-20, £6.70 for those 21-24 and £7.20 for those 25+). Across most of these categories however, the share of apprentices earning less than the NMW is up.
Looking at who is not getting the minimum wage, the rise in the proportion of 25+ apprentices being underpaid (up from 23% in 2014 to 31% in 2016) is worrying given that in 2016 they comprised nearly half of all apprenticeship starts in England.
Of most concern however are the sectoral figures. Hairdressing (47%), construction (28%) and childcare (27%) have the highest rates of apprentices being paid less than the minimum wage.
Now, these figures do not necessarily mean illegal non-compliance. They may reflect the misreporting of hours or wages, and given that they exclude tips and bonuses, they may not reflect total pay. Still, across all sectors at Level 2 and 3, even when all earnings and hours considered, 17% of all age apprentices remained underpaid. However you look at it, these figures represent the lowest of low pay in Britain.
It’s not hard to spot the role of gender in all of this. While men and women are underpaid in equal proportions, it no coincidence that over 90% of both hairdressing and childcare apprentices are female. That said, the construction figures (over 90% male) remind us that women don’t have a monopoly on low pay.
This problem isn’t confined to apprentices either – Resolution Foundation research has uncovered widespread illegal wage theft in the female-dominated social care sector too.
It’s understandable that people are getting vexed at the large pay premiums enjoyed by middle-aged men over the female counterparts at the BBC. But we should just as – if not more – concerned with the pay penalties facing far too many young women at the start of their careers.