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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 pay growth continued to strengthen into 2018 Q2, but remains subdued compared to 2015-17 and low by historical standards. Inflation also began to tick-up 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 is moderate by historical standards, but after falling throughout 2017 this has risen in both 2018 quarters so far.

Pay rises

Median year-on-year real hourly pay growth for employees in work over a year (both job stayers and changers) has risen recently.

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 Q2 2018. Long-term unemployment also continues to fall, but with signs that levels are plateauing.

Underemployment

Underemployment (net hours desired by those in work as well as the unemployed) was stable between Q1 and Q2, but is still very low - almost at the levels of the early 2000s.

Job-to-job moves

Voluntary job-to-job moves (an indicator of a healthy labour market and worker confidence) continued to rise in Q2 2018, and are now approaching pre-crisis levels.

Migrant job entry

Net migration fell slightly has steadied since the post-referendum fall. The rate at which migrants fill vacancies has been steady in recent quarters, though down 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, 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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All Data Spreadsheet

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