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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

Although real pay turned positive again in Q1 2018, growth remains relatively subdued by historical standards. Inflation also began to tick-up at the end of the quarter.

All worker average earnings

Self-employed earnings fell by more than employee earnings in 2016-17 but the gap (at 1.8 per cent) has been constant since then.

Earnings decomposition

The compositional boost to pay associated with a changing workforce remains low by historical levels but rose this quarter.

Pay rises

Median year-on-year real hourly pay growth for employees in work over a year (both job stayers and changers) may have ticked down recently, below pre-crisis levels.

Earnings inequality

Some signs that hourly pay inequality between the upper- and lower-middle (r75:25) may be on the rise but too soon to tell if this is just a brief halt in declining inequality.

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What’s around the corner:

Pay pressures and slack

Unemployment by duration

The unemployment rate continued to fall in Q1 2018. Long-term unemployment also continues to fall, but with signs that levels are plateauing.

Underemployment

There have been further falls in underemployment (net hours desired by those in work as well as the unemployed) so that it is now almost at the levels of the early 2000s.

Job-to-job moves

Voluntary job-to-job moves continue to rise, although with some signs that the post-crisis increase could be coming to an end.

Migrant job entry

After the post-referendum fall, net migration appears to be holding steady, yet Q1 2018 brought the first significant decline in the rate at which migrants fill vacancies.

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What’s in the pipeline:

Long-term labour market health & efficiency

Workforce participation

Labour force participation continues to rise, although the rate of growth has slowed since last quarter.

Labour productivity

Labour productivity is higher than a year ago, but fell in Q1 2018 compared to Q4 2017, suggesting that the recent uptick may have just been a blip.

Training intensity

‘Off-the-job’ training continues to decline, albeit at a slower rate than in the mid-2000s.

Graduates in non-graduate roles

Grads in non-grad roles reflect mismatches between qualifications and jobs, and may constrain productivity. It has risen over time and ticked up again over the past year.

PDF Briefing

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RF’s quarterly earnings outlook four page briefing paper.

Read past briefings

PDF Scorecard

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Spotlight

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All Data Spreadsheet

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