Pay grew four times as fast for Britain’s lowest-paid workers, compared to the highest paid

Real hourly and weekly typical earnings across Britain are still lower than their 2008 level, but in April this year pay rose four times as fast for Britain’s lowest earners compared to its high earners, the Resolution Foundation said in response to the latest Annual Survey of Hours and Earnings (ASHE) published today (Tuesday) by the ONS.

The latest ASHE statistics – the most comprehensive data on employee earnings across the UK – show that real typical hourly pay grew by 1.9 per cent in the year to April 2019, close to the pre-crisis average of 2 per cent. However, a very poor decade for pay means typical earnings are still 2.1 per cent below their 2008 level.

Britain’s lowest earners outperformed this overall picture, however. Real hourly earnings at the tenth percentile grew by 3 per cent – much faster than at the 90th percentile (0.5 per cent). Crucially, the Foundation notes that unlike last year, pay growth was also stronger at the bottom on a weekly basis (4.2 per cent at the 10th percentile, compared to 1 per cent at the 90th) – delivering a big living standards boost to low earners.

The Foundation adds that full-time job-movers also enjoyed particularly strong pay growth of 8 per cent (in nominal terms) – over five times the pay growth for those staying in the same job (1.6 per cent). The Foundation notes that this ‘disloyalty bonus’ should be encouraging more workers to move jobs. However, job mobility for younger workers (aged 18-29) is still lower than pre-crisis levels.

Nye Cominetti, Economic Analyst at the Resolution Foundation, said:

“Pay growth for the typical worker in Britain returned close to pre-crisis norms over the past year, but this follows a disastrous decade meaning pay remains below pre-crisis levels.

“But there have been notable exceptions. Britain’s lowest earners enjoyed the strongest pay rises last year as a result of another big increase in the National Living Wage. As a result, their earnings grew at least four times as fast as for Britain’s top earners.

“The strong pay performance for the lowest earners – on both an hourly and a weekly basis – fully vindicates that ambition of both main parties for a higher minimum wage. But more work will be need to get everyone else’s pay packets beyond where they were before the crisis.”