Lowest paid workers see fastest earnings growth in 2016

Lowest paid workers see fastest earnings growth in 2016 – Article Gerrards Cross : Nunn Hayward

Pay growth between April 2015 and April 2016 was fastest at the bottom end of the earnings scale, according to an annual survey by the Office for National Statistics (ONS).In the period, the lowest paid 5% of workers saw an average 6.2% increase in their weekly wage, while the weekly earnings growth for the highest paid 5% of workers was just 2.5%. The growth in median weekly pay across the UK was 2.2%.

ONS statistician, James Scruton, said: ‘The reason for growth being fastest at the bottom end of the pay scale is likely to be the result of the introduction of the National Living Wage (NLW) shortly before the mid-April 2016 pay period covered by the survey, as we saw a definite boost in pay for those previously paid just below the new rate of £7.20 an hour.

‘We saw a similar pattern back in 1999 when the National Minimum Wage (NMW) came into force.’

The survey – known as the Annual Survey of Hours and Earnings (ASHE) – also measures the gender pay gap. In 2016, the headline figure – the difference between men’s and women’s full-time median hourly pay (excluding overtime) – fell from a revised 9.6% in 2015 to 9.4% in 2016. This is the lowest it has been since the series began in 1997, when the gap was 17.4%.

For higher earners, the gap between men and women for full-time employees has remained largely consistent over time, at around 20%. For the lowest earners, however, the gap has narrowed over the long-term, to 4.9% in April 2016. This constituted the largest year-on-year decrease in the gender pay gap for the bottom tenth of earners since records began in 1997.

Again, the ONS claims that this is likely to be connected to the introduction of the NLW.