2011 Patterns of Pay presents summary analyses from the 2011 Annual Survey of Hours and Earnings, and compares these to results from 2010, and where relevant, with the 1997 to 2010 back series.
In April 2011 median gross weekly earnings were £501 (for full-time UK employee jobs on adult rates whose earnings were not affected by absence), up 0.4 per cent from £499 in 2010.
Between 2010 and 2011 the weekly earnings for full-time employees in the bottom decile grew by 0.7 per cent to £278, compared with growth of 1.6 per cent in the top decile to £1,002.
For the 2010/11 tax year median gross annual earnings for full-time employees on adult rates who have been in the same job for at least 12 months were £26,200. For males, median gross annual earnings were £28,400 while the comparable figure for females was £22,900.
In April 2011 median hourly earnings excluding overtime for full-time employees were £12.62, up 1.0 per cent from £12.50 in 2010. Women’s hourly earnings were £11.91 and men's hourly earnings were £13.11.
The stronger growth in women’s hourly earnings excluding overtime compared with men’s (1.9 per cent compared with 0.8 per cent) meant that the gender pay gap for full-time employees narrowed to 9.1 per cent in 2011, from 10.1 per cent in 2010.
The Annual Survey of Hours and Earnings (ASHE) is ONS’s most detailed and comprehensive source of information on:
levels of earnings (for both full-time and part-time employees and for gender),
make-up of total earnings (split between basic pay and other components),
distribution of earnings (the extent to which earnings are dispersed around the median).
ASHE focuses on estimates of the median rather than the mean. The median is the value below which 50 per cent of employees fall. The median is preferred to the mean for earnings as it is less affected by extreme values and the skewed distribution of earnings data. However, estimates of the mean are still available in the annually published results.
The first few sections of this article present summary analyses on overall medians, the make-up of earnings, the distribution of earnings and gender pay differences for the 2011 ASHE, comparing the analysis with the 2010 results (and, where relevant, with the 1997 to 2010 back series). While these estimates are of interest, they can hide wide variations between different industries, occupations, regions and age groups. The concluding sections of the article give summary analyses of each of these breakdowns and the corresponding gender pay differences.
Median gross weekly earnings for full-time employees on adult rates of pay working a full week in April 2011 were £501 (see Figure 1). At £539, median gross weekly earnings for men increased by 0.2 per cent over the year. This compares with a 1.4 per cent rise for women to £445. Since 1997 median gross weekly earnings for women working full-time have increased significantly more than for men (68 per cent for women compared with 51 per cent for men).
Median gross annual earnings of all full-time employees on adult rates who have been in the same job for at least a year were £26,200 for the 2010/11 tax year. For men, median gross annual earnings were £28,400, up 1.2 per cent from 2010, while the figure for women was £22,900, up 1.9 per cent.
Median hourly earnings, excluding overtime, of all full-time employees were £12.62 in April 2010, an increase of 1.0 per cent since April 2010. Female employees working full-time saw an increase of 1.9 per cent in hourly earnings excluding overtime, compared with 0.8 per cent for men.
Since 1997 there has been a slight fall in the mean total paid hours worked per week by full-time employees (39.1 hours in 2010 compared with 40.0 hours in 1997). In April 2011 full-time men worked 40.2 paid hours per week and full-time women worked 37.3 paid hours per week.
Part-time employees work 30 hours per week or less, or, for those in teaching professions, less than 25 hours per week. They earned a median hourly rate, excluding overtime of £8.00 in April 2011, an increase of 0.4 per cent over the year. For men the increase was 0.1 per cent over the year to £7.67, while for women the increase was 1.3 per cent to £8.10. Since 1997, female employee hourly rates have remained above the levels for male employees (see Figure 2) with little change to the pay gap during this period.
There has been a slight increase in the ratio of part-time to full-time median hourly earnings excluding overtime since 1997. In 2011 median hourly earnings excluding overtime for part-time workers were 63.4 per cent of those for full-time workers (compared with 60.6 per cent in 1997). For men, part-time earnings were 58.5 per cent of full-time earnings (compared with 56.8 per cent in 1997) and for women the comparable figures were 68.0 per cent in 2011 and 68.4 per cent in 1997 (see Figure 3).
The proportion of male employees in the total workforce who worked part-time rose from 4.2 per cent to 5.9 per cent between 1997 and 2011. However, this figure is still well below the proportion of female employees working part-time, which fell from 21.2 per cent to 20.7 per cent of the total workforce over the same period. (Note that these figures are based on Labour Force Survey (LFS) estimates of the composition of the employee workforce for the period April to June 2011).
Median hourly pay for female employees working part-time is higher than that of male employees, partly due to a higher proportion of females working part-time throughout their careers. Figure 4 shows the distribution of part-time employees by gender and by age. This shows that a higher proportion of females work part-time in the higher income age groups (aged 30 to 39, 40 to 49 and 50 to 59). The proportion of males working part-time is higher in the younger age groups as well as the 60 and over age group.
In 2009 ONS reviewed the way it presents gender pay statistics. The review concluded that there was no single measure which adequately dealt with the complex issue of the differences in men’s and women’s pay. ONS now highlights the following measures:
female full-time employees’ median pay compared with male full-time employees’ median pay,
female part-time employees’ median pay compared with male part-time employees’ median pay,
all female employees’ median pay compared with all male employees’ median pay.
ONS prefers to use hourly earnings, excluding overtime, and focuses on estimates of the median. Including overtime can skew the results because men work relatively more overtime than women.
For full-time employees, hourly earnings excluding overtime were £11.91 for women (up 1.9 per cent) and £13.11 for men (up 0.8 per cent). This has resulted in the gender pay gap narrowing in 2011 to 9.1 per cent, down from 10.1 per cent in 2010 (see Figure 5). The gender pay gap has therefore fallen by around eight percentage points (from 17.4 per cent) for full-time employees in the fourteen years since 1997.
Median hourly earnings for women working part-time are higher than those of part-time men. Men’s hourly earnings were £7.67, up 0.1 per cent since 2009, compared with women’s hourly earnings of £8.10, an increase of 1.3 per cent. The negative gender pay difference for part-time employees has therefore widened to minus 5.6 per cent from minus 4.3 per cent in 2010.
The gender pay difference for all employees decreased to 19.5 per cent from 19.8 per cent in 2010, a narrowing of around eight percentage points (from 27.5 per cent) since 1997.
Although ONS’s headline estimates of gender pay differences are based on median hourly earnings, mean hourly earnings provide a useful supplementary measure. The differences between median and mean gender pay gaps reflect the extent to which high earners skew the earnings distribution.
The gender pay difference for mean full-time hourly earnings is wider than that for median earnings and has fallen from 20.7 per cent to 14.9 per cent since 1997 (see Figure 6). Men’s mean hourly earnings were £16.44, up 1.0 per cent from £16.27 in 2010. Women’s mean hourly earnings increased by 1.8 per cent from £13.75 in 2010 to £14.00 in 2011. The mean gender pay difference of 14.9 per cent for full-time employees was at its narrowest in 2011 since the series was introduced in 1997.
In contrast with the median measure, mean hourly earnings for part-time employees were lower for women than for men. Nevertheless, the gender pay gap based on mean hourly earnings decreased to 9.1 per cent, down from 10.5 per cent in 2010.
The gender pay difference based on the mean for all employees also decreased in 2011 to 18.6 per cent from 19.3 per cent in the previous year.
Although median and mean hourly pay provide a useful comparison of men’s and women’s earnings, they do not reveal differences in rates of pay for comparable jobs. This is because such measures do not highlight the different employment characteristics of men and women, such as the proportion of each gender in different occupations and their length of time in service. In addition, it is noteworthy that the gender pay gap is relatively small for employees in the 16 to 39 age groups, and grows substantially thereafter. This may reflect some women taking time out of the labour market in order to have children, thereby missing pay increases and opportunities for promotion that might otherwise have been available. Figure 16 illustrates the variation in the gender pay gap across the age-groups.
ASHE splits gross weekly earnings into four components: overtime payments, payments by results/incentive payments (such as bonuses etc.), premium payments for shift work, and the residual - which includes basic pay and allowances. The first three components vary quite considerably by type of worker.
The proportion of additional payments of mean gross weekly earnings for male employees working full-time was higher than that of their female counterparts over the period 1997 to 2011. In 2011 male employees earned £42 additional payments, which accounted for 6.3 per cent of their total pay, whereas women’s additional payments (£16) accounted for just 3.0 per cent of their total pay.
In 2011 mean overtime payments for full-time employees were £16.60 per week, down from £17.60 in 2010. Mean payments by results/incentive payments decreased from £9.00 in 2010 to £8.60 in 2011. This is the lowest since the introduction of this measurement in 2000.
Mean shift premium payments were £6.20 in 2011, the same as in the previous year. Historically, shift premium payments have fluctuated between £5.40 and £6.10 since 2000.
The 2005 ASHE questionnaire introduced a change in the make-up of gross weekly earnings relating to payments by results/incentive payments. For comparability, this change was also applied to the 2004 results. ASHE results for 2004 to 2011 include incentive payments paid and earned in the pay period, but exclude payments made less often than every pay period. As a result of this change in definition, estimates for payments by results in the pay period are understated from 2004 onwards as incentive payments made in a later pay period than the pay period in which the work is carried out are not captured. However, the estimates are improved relative to previous years, when estimates were overstated due to the capture of some annual incentive payments in monthly or weekly pay periods. The new definition results in greater consistency due to the fact that the data reported do not depend on the reference date of the questionnaire or when annual bonuses are paid, as in previous years.
Figure 7 displays the distribution of gross weekly earnings among full-time employees for the years 1997 to 2011. The median level of gross full-time weekly earnings in 2011 was £501 per week. This is lower than the mean (£606) since the latter is boosted by the relatively few people at the top end of the distribution with extremely high earnings. For 2011, at the bottom of the distribution, a tenth of full-time employees earned less than £278 per week, whereas at the other end of the scale a tenth earned more than £1,002 per week. The ratio of the highest to the lowest decile for gross weekly earnings (3.6 in April 2011) gives a measure of the distribution of weekly pay. This ratio has been very stable since 1997, when it was 3.5.
In the year to April 2011 gross weekly earnings of full-time employees in the top decile of the distribution grew faster than those in the bottom decile (1.6 per cent against 0.7 per cent respectively). Between 1998, the year before the introduction of the National Minimum Wage, and 2011, the top decile increased by 57.7 per cent against a bottom decile increase of 53.7 per cent.
Figure 8 shows the patterns of growth in the top and bottom deciles of gross weekly earnings for full-time employees and for the Retail Prices Index (RPI) since 1997. The RPI is the most familiar general purpose domestic measure of inflation in the UK. Between April 2010 and April 2011 earnings growth in the bottom decile slowed to 0.7 per cent, from 2.0 per cent in the previous year. Employees in the top decile saw growth of 1.6 per cent into 2011, compared with 1.5 per cent into 2010. As in 2010, earnings growth was outstripped by growth in the RPI, which was 5.2 per cent. This is the second consecutive year that the RPI has grown at a higher rate than the growth rates for the top and bottom deciles of the earnings distribution, and only the third year that this has happened since 1997.
Median gross weekly earnings for full-time employees in April 2011 were highest in the mining and quarrying sector at £793 (see Figure 9). This was £127 per week more than the second highest, the financial and insurance activities sector. Weekly earnings in the mining and quarrying sector are boosted by longer paid hours worked by employees relative to other sectors. The mining and quarrying sector is small, but has a relatively high concentration of well paid jobs (there were approximately 340 thousand employee jobs in this sector in the UK in 2010). Over the period 1997 to 2011, financial and insurance activities has featured consistently as one of the highest median gross weekly earnings sectors. The accommodation and food service activities sector has the lowest median gross weekly earnings. At £309, full-time employees’ earnings were some £74 per week lower than the median for the agriculture, forestry and fishing sector (the second lowest paid).
The highest median full-time gross annual earnings were in the mining and quarrying sector, at £41,000. The lowest, £16,100, were in the accommodation and food services sector. The picture changes, however, when we consider mean gross annual earnings, rather than median. On this measure, the highest-earning sector is the financial and insurance activities sector, with mean annual earnings of £63,800. The next highest sector is mining and quarrying at £48,200. The difference between median and mean earnings reflects the skewed nature of the earnings distribution, with high earners exerting a disproportionate pull on mean figures.
The mining and quarrying sector had the highest median hourly earnings excluding overtime for full-time employees (£18.50), followed by financial and insurance activities (£18.42). At the bottom of the scale, median hourly earnings excluding overtime for the accommodation and food service activities sector were £7.29.
The broad industrial groupings described above can hide substantial variation within the sectors. ASHE, however, allows more detailed industrial analyses. For example, it is possible to identify the highest and lowest paid industry divisions (two-digit Standard Industrial Classification (SIC) 2007). Such analyses reveal that the fifth highest division, manufacture of tobacco products, comes from manufacturing, the eleventh highest earning sector as a whole. Food and beverage service activities was the lowest paid division of all, at £307 per week.
For full-time employees, the largest gender pay difference (based on median hourly earnings excluding overtime) was for the financial and insurance activities sector at 40.2 per cent. For part-time employees the gender pay difference varies considerably between the sectors. For example, even though the overall gender pay difference is negative (women earn more than men), many of the broad industrial sectors have positive gender pay differences, the largest of which is in Education at 29.8 per cent.
The difference between private and public sector median earnings for full-time employees decreased between April 2010 and April 2011. Private sector median gross weekly earnings were £476, up 0.8 per cent from 2010. Public sector earnings were £556, up 0.3 per cent (see Figure 10). Public sector mean gross weekly earnings (£627) were also higher than those of the private sector (£598).
ASHE breakdowns by public and private sector are produced according to the legal status of the employers. Between 2008 and 2009 Lloyds Banking Group, the Royal Bank of Scotland Group and HBOS PLC were reclassified from the private sector to the public sector. This means that care must be taken when interpreting public / private sector movements through this period. It is expected that the UK governments’ shares in these banks will eventually be sold and at that time they will be re-classified to the private sector.
As with gender pay comparisons, differences in gross weekly earnings do not reveal differences in rates of pay for comparable jobs. This is due to differences in the composition of the public and private sectors. For example, many of the lowest paid occupations, such as bar and restaurant staff, hairdressers, elementary sales occupations and cashiers, exist primarily in the private sector, while there are a larger proportion of graduate-level and professional occupations in the public sector.
Gender pay differences vary between the public and private sectors, depending on whether the employee is in full-time or part-time employment (see Figure 11). For full-time employees the gender pay gap in the public sector is 9.2 per cent. The comparable figure for the private sector is 18.4 per cent. For part-time employees, the gender pay differences in the public and private sectors are 18.3 per cent and minus 1.2 per cent respectively. Gender pay differences for all employees (regardless of whether they are full-time or part-time) are 18.0 per cent in the public sector and 26.8 per cent in the private sector.
ASHE 2011 data for occupation is coded to Standard Occupation Classification (SOC) 2000 which was introduced in 2002. ASHE 2011 results will be reworked according to the new occupational classification, SOC 2010, and published on 21 March 2012.
The occupational major group (as defined within SOC 2000) with the highest median gross weekly earnings for full-time employees was managers and senior officials at £729 (see Figure 12). Sales and customer service occupations were, as for the years since the introduction of SOC 2000, the lowest paid median gross weekly major group at £305 per week for full-time employees. This major group includes occupations that are generally acknowledged to be low-paid such as retail cashiers and check-out operators, and market and street traders and assistants. In April 2011 the highest increase was in the managers and senior officials group (0.6 per cent). There were decreases in elementary occupations (-0.2 per cent), personal service occupations (-0.2 per cent) and associate professional and technical occupations (-0.4 per cent). Using the mean, the largest increase (2.4 per cent) was for managers and senior officials, while there was a decrease of 0.7 per cent in the associate professional and technical occupations.
The highest median gross annual earnings for full-time employees were in the managers and senior officials group (£38,400) and professional occupations (£37,900). The lowest annual earnings were in sales and customer service occupations, at £15,900.
Managers and senior officials have had the highest annual and weekly full-time earnings for nine of the ten years since SOC 2000 was introduced. However, hourly earnings excluding overtime have been highest in the professional occupations for all of this time. This is explained by the fact that managers and senior officials are paid for more hours of work and receive larger annual incentive payments than employees in professional occupations. Annual earnings for managers and senior officials have typically been 2 to 4 per cent higher than those of professional occupations, while their weekly earnings have typically been 0 to 2 per cent higher. Conversely, hourly earnings for professional employees have been 4 to 9 per cent higher than those of managers and senior officials. In 2011 professional employees’ full-time median hourly earnings excluding overtime were £19.93, and managers and senior officials’ were £19.17.
In 2011 the highest paid unit group occupation (four-digit Standard Occupation Classification 2000) for full-time employees was directors and chief executives of major organisations, with median gross weekly earnings of £1,956. This represents an increase of 9.8 per cent on the 2010 figure. The next highest paid occupation was aircraft pilots and flight engineers with median gross weekly earnings of £1,437 per week. At £233 per week, school mid-day assistants were the lowest paid of all full-time employees on adult rates of pay, followed by waiters and waitresses at £245.
With median hourly earnings excluding overtime of £42.58, aircraft pilots and flight engineers were the highest paid part-time employees for whom estimates were available, followed by medical practitioners (£38.55). The lowest were tyre, exhaust and windscreen fitters (£5.93) and waiters and waitresses (£5.94). £5.93 was the national minimum wage for those aged 21 and over in April 2011.
Figure 13 shows the median gender pay differences for 2011 broken down by the Standard Occupation Classification (SOC) 2000 major occupation groups for full-time employees. The median gender pay gap for full-time employees was narrowest for professional occupations (4.2 per cent) and widest for skilled trades occupations (24.9 per cent).
For part-time employees there are large variations in the gender pay gap. The median gender pay gap is widest for managers and senior officials (19.4 per cent), though this is not as wide as it is for full-time employees in the same occupation group. The gender pay differences for associate professional and technical occupations, administrative and secretarial occupations, and personal service occupations are negative (-13.4 per cent, -9.7 per cent, and -1.1 per cent) meaning that part-time women earn more than part-time men in these occupations.
For all employees, regardless of whether they work on a full-time or part-time basis, the gender pay difference is, again, widest for skilled trades occupations (29.4 per cent). The narrowest gap, as with full-time employees, is for professional occupations at 1.3 per cent.
At £651, London tops the regional list for median gross weekly earnings for full-time employees in April 2011. This was more than one hundred and three pounds above the next highest, the South East (£528). London’s high levels of pay are largely due to the fact that a high proportion of its labour force is employed in high-paying industries and occupations, and also because many employees are entitled to allowances for working in the capital. Northern Ireland (£451) was at the bottom of the regional list with the North East (at £452) and Wales (at £454) completing the bottom three. The figure for the whole of the UK was £501.
The largest increase since 2010 was seen in Northern Ireland, where weekly earnings rose by 3.0 per cent. There were decreases of 1.4 per cent and 0.8 per cent in the North West and East Midlands.
Since 1997 similar patterns were observed for median gross annual pay and median hourly pay excluding overtime, with London topping the list followed by the South East. The North East, Wales and Northern Ireland have the lowest pay levels across the regions. The North West was the only region to see a fall in full-time hourly earnings, down by eleven pence to £11.64.
It should be noted that earnings comparisons take no account of variations in prices for goods and services between regions and therefore do not necessarily indicate differences in the standard of living. Neither do they take account of differences in the regional composition of the workforce, meaning that like-for-like comparisons may not be appropriate. For example, a region might have a lower level of median earnings than another if it has a higher proportion of employees in industries or occupations with relatively low earnings.
In the UK, the gender pay gap was 9.1 per cent. The largest gender pay gap was 14.9 per cent in the South East region. In Northern Ireland the pay gap was negative, at minus 2.0 per cent. Over the period 1997 to 2011 the largest fall in the gender pay difference was in Northern Ireland (from 16.5 per cent to minus 2.0 per cent) and the smallest was in London (15.1 per cent to 13.1 per cent). Figure 14 illustrates changes in the gender pay gap for the four home countries.
Median gross weekly earnings for full-time employees climb steadily with age, reaching a maximum in the 40-49 age-group (£565), and declining thereafter. Women’s earnings peak earlier than those of men, reaching a high in the 30-39 age-group of £519. This pattern is continuous over the period 1997 to 2011. Men’s full-time earnings reached their highest of £619 for those aged 40 to 49 (see Figure 15).
The largest increase in full-time median gross weekly earnings between April 2010 and April 2011 was recorded for employees aged 60 and over at 1.7 per cent. There were decreases of 7.9 per cent and 1.0 per cent for the employees aged 16 to 17 and 22 to 29 respectively.
Figure 16 shows median gender pay differences by age group. The pay gap, based on full-time hourly earnings excluding overtime, is relatively small for the younger age-groups, ranging from minus 3.6 per cent for 22 to 29 year-olds to 4.4 per cent for 18 to 21 year-olds. The gap then increases dramatically for the 40 to 49 age-group (15.6 per cent), peaks in the 50 to 59 year olds (16.0 per cent) and tails off for those aged 60 and over.
Gender pay differences for part-time employees and all employees (regardless of whether they work on a full-time or part-time basis) show a similar pattern to the full-time pay gap, with relatively small differences for young age-groups and high differences for older age-groups.
Each month ONS also collects information on earnings from the Monthly Wages and Salaries Survey, used to construct the Average Weekly Earnings (AWE) indicator. This survey asks 9,000 employers to provide information about total pay and numbers of employees, but does not collect more detailed information on the occupational and demographic characteristics of their employees. The AWE is ONS's lead measure of changes in the level of earnings, having replaced the Average Earnings Index (AEI) in the Labour Market Statistical Bulletin from January 2010 onwards.
The AWE and ASHE are not directly comparable on all measures of earnings. The closest measure that can be derived and compared for these surveys is for mean gross weekly pay. In the year to April 2011 the ASHE estimate of mean gross weekly pay for all employees (regardless of whether they were full-time or part-time) was £491, up 0.8 per cent on the previous year. The comparable estimate from the AWE was £460, up 2.5 per cent from April 2010. For the private sector, the ASHE estimate of mean gross weekly pay for all employees was £489, while the AWE estimate was £456. For the public sector, the estimates were £508 for ASHE and £473 for AWE.
In April 2011 the number of UK jobs paid below the national minimum wage was 299,000, accounting for 1.2 per cent of all jobs in the labour market.
There were three rates for the national minimum wage in April 2011: one for those aged between 16 and 17 (£3.64 per hour), one for those aged between 18 and 20 (£4.92 per hour) and one for those aged 21 and over (£5.93 per hour).
The number of jobs paid below the national minimum wage was:
15,000 jobs (5.6 per cent) held by those aged 16 to 17,
51,000 jobs (4.6 per cent) held by those aged 18 to 20,
233,000 jobs (1.0 per cent) held by those aged 21 and over.
People in part-time work were more than twice as likely as people in full-time work to be paid less than the minimum wage, with 1.9 per cent of part-time jobs and 0.9 per cent of full-time jobs falling below the minimum wage. Jobs held by women are more likely to fall below the minimum wage than jobs held by men (1.4 per cent compared with 1.0 per cent). This is primarily due to the greater number of women in part-time jobs.
It is important to note that these estimates do not measure non-compliance with the National Minimum Wage legislation. ASHE does not indicate whether individuals fall into a category that is exempt from the legislation, such as apprentices or new trainees.
Tables accompanying (and referenced within) this article can be found on the ONS website by searching for 'ASHE 2011'.
The Annual Survey of Hours and Earnings (ASHE) is based on a sample of employee jobs taken from HM Revenue & Customs PAYE records. Information on earnings and paid hours is obtained in confidence from employers. It does not cover the self-employed nor does it cover employees not paid during the reference period. In 2011 the information related to the pay period which included 13 April. The 2011 ASHE is based on approximately 190 thousand returns.
ASHE replaced the New Earnings Survey (NES) as ONS’s main source of information on the distribution of earnings. Articles describing the ASHE methodology and the impact of its introduction on 1997 to 2004 data can be found on the ASHE page of the ‘Guidance and methodology’ area on the ONS website. The main differences between ASHE and NES are:
ASHE results are weighted to the number of jobs given by the Labour Force Survey.
ASHE imputes for item non-response.
The coverage of employees for ASHE is greater than that of NES.
The median replaces the mean as the headline statistic. The median is the value below which 50 per cent of employees fall. It is preferred over the mean for earnings data as it is less influenced by extreme values and because of the skewed distribution of earnings.
Since 2004, supplementary survey information has been collected to improve coverage and make the survey more representative. This includes employees who have either changed or started new jobs between sample selection from HM Revenue & Customs records and the survey reference period in April. 2004 results are also available excluding the supplementary information so as to be comparable with the back-series for 1997 to 2003, which was generated by imputing and weighting data from the New Earnings Survey (NES).
A new questionnaire was introduced for the 2005 survey. Details on the impact of introducing the new questionnaire can be found on the ASHE page of the Guidance and methodology area on the ONS website (35.3 Kb Pdf) .
Changes to the wording and definitions meant that some of the information requested from respondents differed from that supplied in previous surveys. The introduction of the pay ‘for other reasons’ question resulted in the inclusion of earnings information which may not have been collected in the past. Results for 2004 including supplementary information were reworked to allow for this missing pay. More details on the methodology involved in estimating pay for other reasons can be found on the ASHE page of the ‘Guidance and methodology’ area on the ONS website.
In addition, the definition of incentive/bonus pay changed for 2005 to only include payments that were paid and earned in April. This brought the definition more in line with that used in the Average Earnings Index (AEI) and subsequently AWE and resulted in greater consistency of ASHE results. Results for 2004 including supplementary information were reworked to exclude irregular bonus/incentive payments to make them consistent with results from 2005 onwards. The adjustments made to the 2004 data in order to produce estimates comparable with the 2005 data also had an impact on the gap between public and private sector earnings. The changes to the questionnaire were:
the exclusion of incentive payments paid outside the pay period,
the inclusion of pay for other reasons.
The exclusion of incentive payments paid outside the pay period pulls down the private sector estimates more than the public sector estimates because private sector employees receive a higher proportion of incentive pay than public sector employees. Also, public sector employees receive greater proportions of pay for other reasons. Therefore, public sector earnings estimates increased more than the private sector estimates when other pay was included.
In 2006 ASHE moved to the ONS standard for geographic areas using Output Areas (OAs) as the building block to higher level geographic breakdowns. Previously, ASHE geographies were created by matching returned postcode information against the Inter Departmental Business Register to give various levels of geographic information. The key points are:
ASHE results for geographic areas are produced in line with the ONS standard and this allows further geographic analysis variables to be produced,
the quality of geographic results has improved.
In addition, from 2006 the Labour Force Survey (LFS) moved from using seasonal quarters to calendar quarters. As ASHE uses LFS data in the calculation of aggregation weights, it was necessary to move from using data taken from the LFS spring quarter to LFS quarter two.
The inclusion of supplementary information since 2004, the introduction of a new questionnaire in 2005, and the move to using new ONS geographies and LFS calendar quarters in 2006 introduced a discontinuity into results from 2004. Therefore a consistent series which takes into account all of these changes has been produced going back to 2004. For 2004, results are also available that exclude supplementary information so as to allow comparisons with the back series generated by imputation and weighting of the 1997 to 2003 NES data.
In March 2007 ONS released information on its statistical work priorities over the period 2007-08. ONS announced that the sample size of the ASHE was to be reduced by 20 per cent. ASHE results for 2007 and 2008 are based on approximately 145 thousand returns, down from 175,000 in 2006. The impact of this change was minimised by reducing the sample in an optimal way, with the largest sample reductions occurring in industries where earnings are least variable. The sample cut did not affect Northern Ireland, neither did it affect a number of organisations with an agreement to provide information electronically.
ONS also introduced a small number of methodological changes, which improved the quality of the results. These included changes to the sample design itself, as well as the introduction of an automatic occupation coding tool, ACTR.
The key benefits of moving to ACTR coding are:
an improvement in the quality and consistency of ASHE results,
out-of-date codes are updated annually,
ACTR provides ASHE and ONS with a standard tool for coding occupation.
The methodological changes made in 2007 have been applied to the 2006 ASHE so that from 2006 to 2010 results are available on the same basis. For 2006, results are also available on a continuous basis with 2004 and 2005.
In May 2008 the LFS was re-weighted to the latest (2007/08) population estimates. Previously LFS results were based on population totals published in 2003. ASHE uses LFS to calculate aggregation weights. The revised LFS figures were used for 2007 (revised) and 2008 ASHE results. The impact of the new weights on the ASHE results for 2007 is small.
In 2009 the 1 per cent sample of employees whose employers had registered PAYE schemes was restored, following the two years in which the sample size was reduced by 20 per cent. ASHE results for 2009 were based on approximately 179 thousand returns, up from 146 thousand returns in 2008.
The Standard Industrial Classification (SIC) 2007 replaced SIC 2003 as the classification used to present earnings statistics for ASHE. The first year available on the new basis is 2008. From 2009 onwards the figures are presented on the SIC 2007 basis only.
It is also important to note that ASHE includes breakdowns by public and private sector according to the legal status of the employers. Between 2008 and 2009 Lloyds Banking Group, the Royal Bank of Scotland Group and HBOS PLC were reclassified from the private sector to the public sector. Interpretation of public / private sector movements is therefore more difficult between 2008 and 2009 than in previous years.
In 2010 the system underpinning the ASHE sample, HM Revenue and Customs’ PAYE system, was replaced. Where the previous system represented employers’ accounts, the new system reflects the PAYE pay and tax details of individuals. The introduction of this new PAYE system resulted in a discontinuity in the way that employments are created and recorded. The change had a minimal impact on the ASHE sample and the results for 2010.
The change in the survey’s sampling frame has extended the coverage of ASHE to all levels of earnings, and this extension should improve the quality of the estimates going forward.
The earnings information collected relates to gross pay before tax, National Insurance or other deductions, and generally excludes payments in kind. With the exception of annual earnings, the results are restricted to earnings relating to the survey pay period and so exclude payments of arrears from another period made during the survey period. Payments due as a result of a pay settlement but not yet paid at the time of the survey are also excluded.
For particular groups of employees, changes in median earnings between successive surveys may be affected by changes in the timing of pay settlements, in some cases reflecting more than one settlement and in other cases no settlement at all.
Most of the published ASHE analyses relate to full-time employees on adult rates whose earnings for the survey pay period were not affected by absence. They do not include the earnings of those who did not work a full week, and those whose earnings were reduced because of sickness, short-time working, etc. Also, they do not include the earnings of employees not on adult rates of pay, most of whom will be young people. Some more information on the earnings of young people and part-time employees is available in the detailed annual published ASHE results. Full-time employees are defined as those who work more than 30 paid hours per week or those in teaching professions who work more than 25 paid hours per week.
The increase in average earnings from one year to the next reflects several factors: pay settlements implemented between the April survey dates; changes in the amount of paid overtime and other payments relative to basic pay; and the structural effects of changes in the composition of the ASHE sample and the employed labour force.
In line with normal practice this article contains revised estimates from the previous year's survey, in this case the 2010 results, which were first published on 8th December 2010. These take account of some corrections to the original 2010 data which were identified during the validation of the results for 2011, as well as late returns.
The Average Weekly Earnings (AWE) is based on the Monthly Wages and Salaries Survey of 9,000 employers and provides information on changes in mean earnings for broad industrial sectors. No information is available on occupation, paid hours worked, and other characteristics of the workforce.
The LFS collects information on the earnings and hours of about 15,000 households over each quarter. In addition it collects data on a wide range of personal characteristics, including education level and origin. This enables the preparation of statistics on levels and distribution of earnings similar to ASHE but with lower precision due to the much smaller sample size.
National averages of earnings hide wide variations between different collective agreements, industries, occupations, regions and age groups. The published tables containing the detailed annual ASHE results for the UK include analyses of each of these and can be found on the ONS website by searching for ‘ASHE’.
Low pay estimates show the number of jobs paid below the National Minimum Wage in the UK. The estimates are produced using a methodology based solely on ASHE data. Further information on the low pay methodology and detailed results can be found on the ASHE page of the Guidance and methodology area on the ONS website.
Quality and methodology
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