PRESS RELEASE 14 October 1999

Earnings picking up for women and the low paid

The latest official figures on earnings released today show encouraging signs that the minimum wage is improving earnings for the lowest paid, and that the pay gap between men and women has narrowed slightly.

• After several years in which the pay difference between the sexes had hardly changed, the gap has narrowed slightly. Full time women saw their weekly earnings go up by 5.3 per cent between April 1998 and April 1999, compared to 3.2 per cent for men.

• This still leaves men earning 35 per cent more than women, compared to 38 per cent last year. However, a large part of thus was due to women working extra hours. Hourly earnings for full-time women grew faster than men's, but only by 1.2 per cent.

• There are encouraging signs that the Minimum Wage is starting to have an effect on the earnings of the lowest paid. The full effect is not yet known, but the number of people earning below the NMW rate for their age fell by 40 per cent between March-May 1998 and the same period this year.

• The huge gap between the highest and lowest earners, which grew dramatically in the 1980s and more slowly in recent years, has stabilised. Unlike last year, the weekly earnings of the bottom ten per cent actually grew faster than those of the top ten per cent- 4.3 per cent compared to 3.7 per cent. The inequality is still huge though. At £645 per week, the top decile of earnings, is nearly three and a half times the bottom decile of £190.

• Among low earners, there have been winners and losers. Women in hairdressing earn nearly 12 per cent more per hour than in 1998, while women cleaners earn just 3 per cent more. Among men, waiters, hotel porters and checkout operators actually earn less than last year on average.

• In mid April 1999 there were nearly half a million people earning between £3.60 and £3.80 (i.e. on or just above the minimum wage). This shows that the majority of employers are paying the minimum wage, but highlights the danger that it could become the going rate in some jobs. With no plans for regular uprating, £3.60 might be a ceiling rather than a floor for many workers in the UK.

Commenting on the figures Nick Burkitt, senior researcher at the Low Pay Unit said:

"For the first time since the 1970s, the gap between the top and bottom earners has shrunk rather than grown. The minimum wage is clearly helping many people in low paid jobs, especially women. But tackling in-work poverty needs sustained effort in the face of economic trends towards inequality. A low minimum wage which does not rise with average earnings could actually end up holding some people's pay down."

Further information: Nick Burkitt or Alison Balchin on: 0171 713 7616/ 0788 764 3750 (mob)

Source: New Earnings Survey 1999