UK Workers See Biggest Rise in Pay in 25 Years, with Women Outpacing Men
British workers have experienced the highest increase in weekly pay in over a quarter of a century, according to a comprehensive labor market survey published on Wednesday. The survey, known as the Annual Survey for Hours and Earnings (ASHE), is produced by Britain’s official statistics agency.
In the 12 months leading up to April, weekly earnings for full-time employees rose by 6.2%, marking the fastest growth since comparable records began in 1997. The pace of earnings growth for women outpaced that of men, with women seeing a 9.1% increase in pay compared to a 6.8% increase for men. However, when only full-time employees were considered, the difference in pay growth between genders was smaller.
Despite the positive growth in earnings, workers found themselves out of pocket due to a larger increase in inflation over the same period. When adjusted for the Consumer Prices Index, including owner occupiers’ housing costs, median weekly earnings for full-time employees fell by 1.5% on the year. This decline highlights the impact of rising living costs on workers’ finances.
The survey also revealed that the sharpest increase in weekly earnings was seen among full-time employees in the private sector, whose earnings rose by a record 7.7%. In comparison, their counterparts in the public sector experienced a 3.7% rise, a slight slowdown from the 4.9% increase seen the previous year.
However, despite the overall positive trend, there remains a significant gender pay gap. Median weekly full-time earnings for women were found to be 13% lower than those for men. This highlights the persistent issue of pay inequality in the UK workforce.
The Office for National Statistics (ONS) noted that the largest increases in pay were seen in lower-paying professions, with earnings in caring, leisure, and other service occupations rising by 9.4%. This suggests that efforts to address pay disparities may need to focus on these sectors.
The ASHE survey also showed that median gross annual earnings for all full-time employees rose to £34,963 ($42,452), a 5.8% increase from the previous year. This figure represents a slightly smaller increase compared to the 5.9% growth seen in the 12 months leading up to April 2022.
The Bank of England has expressed concerns about the rapid pace of pay growth in the country, fearing it could lead to a wage-price spiral. As a result, it is expected to keep interest rates steady during its upcoming meeting and signal its commitment to maintaining higher rates.
It is worth noting that the accuracy of Britain’s monthly official jobs and pay figures has been compromised recently due to low response rates from individuals participating in surveys. The ASHE survey, however, is based on responses from employers, providing a more reliable source of data.
The significant rise in earnings for UK workers, particularly for women, reflects positive progress in the labor market. However, the impact of inflation on workers’ finances and the persistent gender pay gap highlight areas for improvement. As the Bank of England monitors the situation closely, the focus will now be on sustaining pay growth while managing potential inflationary pressures.
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