In the year to April 2011, the median gross annual earnings for full-time employees were £26,200, an increase of 1.4 per cent compared with £25,900 in 2010. The median gross annual earnings for men were £28,400, up 1.2 per cent from 2010, and for full-time women they were £22,900, up from 1.9 per cent.
These figures are from the Office for National Statistics’ 2011 Annual Survey of Hours and Earnings, published on 23 November 2011. It is a major survey of employees, conducted via employers, and therefore misses the high earnings of self-employed directors at the top of the income distribution.
This year’s ASHE survey reveals some remarkably low movements in earnings over the year to April 2011. For example, the hourly earnings, excluding overtime, for full-time employees at the bottom decile grew by just 0.1 per cent to £7.01 an hour, compared with growth of 1.8 per cent at the top decile to £26.75 an hour. There is an overall stretching of the earnings distribution towards the top end.
This suggests that earnings among the lowest paid were lifted by the October 2010 increase in the National Minimum Wage of 2.2 per cent (a move in the middle of the year to April 2011) but that other low paid employers earning above the NMW saw very little pay movement at all. This would fit with the pattern of pay we have observed in the Average Weekly Earnings series for distribution, retail, hotels and restaurants which has shown very little earnings movement in the past year.
The overall salary movement of 1.4 per cent is for those people who were in continuous employment between April 2010 and April 2011. The picture is bleaker if all full-time employees are included, including those changing jobs or re-entering the labour market. For this larger group, median gross weekly earnings for full-time employees were £501, up just 0.4 per cent from £499 in 2010. For men, full-time earnings were £539, up 0.2 per cent, compared with £445 for women, up 1.4 per cent.
A look back at ASHE findings for April 2009 and April 2010 shows the impact of the recession and its aftermath on earnings growth, with earnings increases for men lagging those for women in each year. In the year to April 2009, median earnings for men rose by 1.8 per cent compared to 3.4 per cent for women. In the year to April 2010, median earnings for men rose by 1.3 per cent and for women by 3.1 per cent. Much of the lower earnings growth for men in this period came from pay freezes and sort-time working in manufacturing as well as lower shift working and overtime.
One consequence of the different rates of earnings growth for men and women is that the gender pay gap has closed further. The gap between men’s and women’s median full-time hourly earnings excluding overtime was down to 9.1 per cent in April 2011.
The overall findings show very starkly the impact of both recession and austerity on pay movements over the past three years, at a time when inflation has been running at 5 per cent a year through 2010 and 2011. The reduction in the real value of wages and salaries is without precedent in the modern era and is the major cause of the consumer caution which is inhibiting economic recovery.