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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

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What's happened:

The earnings breakdown

Median employee earnings

The most timely pay data showed median real pay growth continued to strengthen into 2018 Q3, but remains subdued compared to 2015-17 and low by historical standards.

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

Median year-on-year real hourly pay growth for employees in work over a year (both job stayers and changers) stood at 0.8% in April 2018, an increase on 2017.

Pay rises

Hourly pay inequality between the upper- and lower-middle (r75:25) continued its fall after briefly ticking upwards. The r90:10 ratio continued to fall.

Earnings inequality

Hourly pay inequality between the upper- and lower-middle (r75:25) rose slightly in 2018, having fallen since 2010. The ratio of high to low high incomes (r90:10) continued to fall.

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What’s around the corner:

Pay pressures and slack

Unemployment by duration

The unemployment rate continued to fall in Q3 2018. Long-term unemployment also continues to fall, but with signs that levels are plateauing.

Underemployment

Under-employment (net hours desired by those in work as well as the unemployed) increased slightly in Q3, but is still low, and below pre-recession levels.

Job-to-job moves

Voluntary job-to-job moves (an indicator of a healthy labour market and worker confidence) fell in Q3 2018, bucking the trend of recent years.

Migrant job entry

In 2018 net migration stabilised (at 273k in June) after the post referendum fall. In Q3 the share of job entries made up by migrants was down slightly on the year.

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What’s in the pipeline:

Long-term labour market health & efficiency

Workforce participation

Labour force participation continues to rise, as it has for the every quarter since summer 2012. In Q3 2018 the rate was 0.7% up on the year.

Labour productivity

In Q3 2018 labour productivity was up on the quarter and year (by 0.9%). However in the latest data (for November) productivity growth slowed to just 0.2%.

Training intensity

‘Off-the-job’ training was up slightly on the previous quarter, but down on the year. The long-term fall in training intensity appears to have plateaued.

Graduates in non-graduate roles

Grads in non-grad roles can reflect skills mismatch, and may keep individual productivity below potential. The rate of established grads in such roles continues to rise gently.

PDF Briefing

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RF’s quarterly earnings outlook four page briefing paper.

Read past briefings

PDF Scorecard

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All Data Spreadsheet

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