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 was still growing at a healthy rate in Q1 2020, but in the timely PAYE data for May, median employee pay fell by 2.4% in real terms (which includes the effects of furloughing).

All worker average earnings

Before the crisis, the gap between employee pay and our all-worker measure was growing. The big hit that the self-employed have suffered in this crisis suggests it may grow further.

Earnings decomposition

Pay growth was 0.8ppts higher as a result of compositional effects (e.g. due to expanding jobs in high-paying occupations) than it would have been absent these effects.

Pay rises

Median year-on-year real hourly pay growth for employees in work over a year (both job stayers and changers) stood at 2.0% in April 2019, 1.3ppts higher than the previous year.

Earnings inequality

Our headline measures of earnings inequality continue to fall, but these do not include the impact of the crisis, which we know has been larger for low-paid workers.

+ Open

What’s around the corner:

Pay pressures and slack

Unemployment by duration

The headline unemployment rate does not yet reflect the coronavirus crisis, because many out-of-work people are being categorised as inactive with job-search activity suppressed.

Underemployment

Under-employment was up slightly on the year to Q1 2020, suggesting the labour market had moved past peak tightness before the crisis.

Job-to-job moves

The proportion of workers voluntarily moving job (an indicator of worker confidence) was down 15% on the previous year in Q1 2020.

Migrant job entry

The proportion of jobs going to new migrants fell slightly over the past year, and remains below the 2017 peak.

+ Open

What’s in the pipeline:

Long-term labour market health & efficiency

Workforce participation

The labour force participation rate of 18-69-year-olds reached 76.6% in Q1 2020. The largest increases have been among older workers, partly in response to the rising State Pension age.

Labour productivity

Productivity, weak for a decade, was down 0.6% on the year in Q1 2020 (which captures a tiny bit of the output fall from the current crisis).

Training intensity

The long-term trend in falling ‘off-the-job’ appears to have turned a corner, with this measure having risen for four straight quarters. But it remains low.

Graduates in non-graduate roles

The proportion of graduates in non-graduate roles is unchanged in the past year, at 36.1% of all graduates.

PDF Briefing

Download (0Kb)

RF’s quarterly earnings outlook four page briefing paper.

Read past briefings

All Data Spreadsheet

Download (677Kb)