In our latest quarterly Earnings Outlook, we focus on two of the biggest changes to the UK labour market over the past two decades – rising self-employment (from 3.4 million in 1999 to 5 million today) and the introduction and ramping up of the legal minimum wage (from £3.60 in 1999 to £8.21 today) – to assess whether the two trends are linked.
- Self-employment, and its relationship with the minimum wage, is the main focus of our Spotlight piece ( on page 4 of the Outlook). We challenge the idea that a higher minimum wage is pushing people into self-employment.
- Our earnings breakdown shows that real pay growth is strengthening, supported by changes in workforce composition
- Our analysis of pay pressures and slack shows that the labour market is still tightening. Employment remains close to its record high, and underemployment is now at its lowest point this century.
- Our review of longer-term labour market health, as usual, shows areas of concern. Productivity growth is very low, as is the level of workplace training, which could improve productivity.