Why you should care
As the nation stares down the barrel of Brexit, a little good news.
The U.K.’s gender pay gap fell this year to its lowest level on record and has been virtually eliminated for full-time workers under 40, suggesting that the government’s naming and shaming efforts have been paying off.
The Office for National Statistics’ main annual survey of pay also showed reasonable weekly earnings growth as people worked longer hours, and a large decline in the proportion of employees with hourly pay levels well below the national average.
Together, the figures will offer a boost to the government ahead of next week’s budget, showing falling gender pay differences and a decline in very low pay, even if hourly wage levels have barely grown above inflation. According to the ONS’ annual survey of hours and earnings:
The gender pay gap for full-time employees fell to 8.6 percent in April 2018, down from 9.1 percent in 2017 and 17 percent in 1997.
Most of the improvement came from younger workers, among whom gender discrimination has disappeared far more quickly. The 2018 full-time pay gap was less than 1.5 percent for full-time workers in their twenties and thirties but still 12.8 percent for people in their forties and 15.5 percent for those in their fifties.
Much of the gap relates to a pay penalty for mothers after they have children, with hourly part-time pay levels significantly lower than full-time pay.
Women are the predominant part-time workers, with 28 percent of females aged 22 to 30 working part time, rising to 38 percent of women in their thirties and 41 percent in their forties.
Frances O’Grady, TUC general secretary, said the fall in the gender pay gap was far too slow. “At this rate, another generation of women will spend their whole working lives waiting to be paid the same as men,” she said.
Some of the largest gender pay gaps were for production managers in the mining and energy sectors, construction supervisors, printers and financial managers and directors.
Women were paid a little more than men in jobs such as butchery, public relations and architecture, with a 23 percent gap favoring women among counselors.
With its sample size being far bigger than other measures of wages and earnings, the annual ONS data, which samples one in 100 employees whose national insurance numbers end in 14, provides far more information than the monthly data on trends in pay.
It showed median hourly earnings growth of 2.5 percent in 2018, the same as in 2017 and barely above the 2.4 percent consumer price inflation rate in April.
Full-time workers did a little better, with median hourly wages rising 2.7 percent, but with an increase in their average hours in 2018, the rise in median weekly earnings growth was 3.5 percent, the highest figure on this basis since 2008.
With the introduction and steady rise in the minimum wage level for those over 25, the levels of low pay — classed as hourly pay below two-thirds of the median or £8.52 ($10.93) an hour, compared with the £7.50 ($9.62) minimum wage — has dropped sharply. In 2013, 21.6 percent of employees had jobs classed as low-paid by the hour, dropping steadily to 17.8 percent in 2018.
There was little change in the proportion of people in high-paid work, with 25.7 percent of jobs paying more than 1.5 times the median, or more than £19.17 ($24.58) an hour in 2018.
Stephen Clarke, a senior economist at the Resolution Foundation, said a worrying trend in the figures was that wages were growing most strongly at the top of the scale.
“Today’s figures also show the first growth in pay inequality since 2010,” he says. “While a rising minimum wage helped reduce the proportion of low-paid jobs to its lowest point since the series began, a drop in hours worked by the lowest-paid resulted in further falls in real weekly wages in the bottom fifth of the distribution.”
OZY puts it in perspective: China’s gender pay gap is 22 percent, down from 30 percent in 2017, while the OECD reports that the U.S. still has an 18 percent pay gap. But South Korea’s gap is truly shocking at 37 percent.
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