Low Pay Britain 2011

Published on Wages & Income

On 1 October 2011, the National Minimum Wage rose from £5.93 to £6.08, giving a helping hand to families in the face of rising living costs. But there are still 5 million workers – 20% of all employees – earning less than the Living Wage which is designed to provide a ‘minimum acceptable quality of life’. This is of serious concern given the significance of wages to household incomes and living standards.

What is perhaps most striking is the prevalence of low paid employment across the economy. Six out of sixteen sectors have over 30% of employees earning below the Living Wage. Just fewer than 10 percent of people who hold degrees earn less than the Living Wage. 1 in 7 of those aged 36-45 (at the point of their ‘peak earnings’ potential) are on low pay, as are some of those working in the skilled trades and professional occupations. This shows that the issue of low paid employment is not confined to a narrow stratum of society; it affects workers of all types across the economy.

  • Low wage workers are more likely to be female, part-time and in the private sector. They are also more likely to be younger, though this is in part due to the traditional trajectory of earnings over the life course.
  • Low wage workers are more likely to be found outside of London and the South East although in absolute terms, the South East, the North West and London all have more than half a million people earning less than the Living wage.
  • The retail and transport sectors have the greatest concentration of employees earning less than the Living
  • Wage while finance and public administration are among the lowest. Unsurprisingly, those without any formal qualifications are more likely than other employees to earn less than the Living Wage, while those with degrees are least likely.
  • Six out of sixteen sectors have over 30% of employees earning below the Living Wage. Just fewer than 10 percent of people who hold degrees earn less than the Living Wage. 1 in 7 of those aged 36-45 (at the point of their ‘peak earnings’ potential) are on low pay, as are some of those working in the skilled trades and professional occupations. This shows that the issue of low paid employment is not confined to a narrow stratum of society; it affects workers of all types across the economy.