ONS: Weekly wages stable, but young staff see pay slashed

Staff in accomodation and food services are among the worst hit
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The coronavirus pandemic had little effect on most employees’ weekly pay in April thanks to the furlough scheme, but younger employees and those in accommodation and food services saw their pay slashed and many saw their pay fall below the legal minimum.

According to the Office for National Statistics’ Annual Survey for Hours and Earnings (ASHE) 2020, median weekly pay for full-time employees in April was £586 – up 0.1% on a year earlier. The full time public sector weekly wage increased by 2.4% year-on-year, but private sector employees saw a 0.6% drop in full-time weekly pay.

When adjusted for inflation, real terms weekly earnings fell by 0.9% compared to the previous year.

At the time the data was collected in April some 8.8 million people had been furloughed under the Coronavirus Job Retention Scheme. It appeared this had little effect on median pay at a national level, the ONS said.

However, because of furlough, there were 2,043,000 jobs where employees aged 16 or over were paid below the national minimum wage or national living wage, more than four times the 409,000 jobs a year earlier.

“The effect that the CJRS had in April is clear. Employees being placed on the scheme prevented paid hours falling at the rate shown by the actual number of hours worked, as reported in the Labour Force Survey [which showed a 19% drop in hours worked in April to June 2020]. A subsequent downward pressure on weekly earnings from a fall in hours was largely suppressed,” it said.

Actual hours worked across all sectors fell by 20% from 2019 but paid hours fell by only 1.5%.

Hardest hit

While pay held up for most employees, younger workers – including the lowest-paid part-time staff – and those working in accommodation and food services saw their weekly pay slashed. Both were more likely to be furloughed than other employee groups and were less likely to have their pay topped up by their employer.

Employees in the 16 to 17 years and 18 to 21 years age groups saw weekly paid hours fall by 5.7% and 3.4% respectively, while staff in accommodation and food services experienced a 12% decline in paid hours and an 18.1% fall in weekly pay.

The ONS estimated that 29% of employed 16 to 17 year olds and 22% of 18 to 24 year olds were furloughed on reduced pay in April. Nearly two in five accommodation and food services staff were furloughed during the period, and just over a quarter of arts, entertainment and recreation employees had their jobs retained under the scheme.

Of all employee jobs, 15.1% could be defined as ‘low-paid’ – where staff earn less than two-thirds of median hourly wage. This is the lowest proportion of low-paid jobs by hourly rate since the ONS began collecting this data in 1997.

Cuts after years of growth

People in skilled trades occupations, professional and technical occupations and process plant and machinery operatives saw their full-time weekly earnings fall between 2019 and 2020, despite several years of pay growth beforehand.

The ONS said: “Over the five years to 2019, occupations with typically lower pay experienced higher growth in earnings, driven by increases in the national minimum wage, which increased by more than 20% during the same period.

“In 2020, negative pay growth was experienced in some of these occupations, notably skilled trades occupations (negative 6.3%, this group containing many employees working in construction and food services) and process, plant and machine operatives (negative 5.3%).”

People in the north east of England saw the largest fall in median full-time gross weekly earnings in April 2020 (1.4%), followed by the east and south west (both of which saw a 1% reduction) and Yorkshire and the Humber (down 0.6%). Full-time employees in the East Midlands saw their pay grow by 2.6% compared with 2019, while staff in Scotland experienced a 2.5% uplift in earnings.

Median annual pay for full-time employees was £31,461 for the tax year ending 5 April 2020, up 3.6% on the previous year.

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