2016 ASHE data released
Nov 21st, 2016On 26th October 2016 I attended a seminar hosted by the Office for National Statistics covering the results and analyses from the latest Annual Survey of Hours and Earnings (ASHE).
Whereas median Average Weekly Earnings (AWE) increased by 2.2% as compared with the figure for 2015, ASHE 6115 at the 80th percentile (the most common measure used in periodical payments orders for care and case management) showed better growth, up 3.66% against the 2015 figure.
It is quite evident that this latest ASHE data release has captured some of the early impact of the introduction of the National Living Wage (NLW) which came into law on 1st April 2016, with lower paid occupations experiencing markedly greater growth than higher paid occupations.
The “care, leisure and other service occupations” sector, in which ASHE 6115 sits, represents the lowest paid collective occupations of all those that are measured by the ONS in the ASHE survey.
However, the introduction of the National Living Wage has meant that this sector also experienced the greatest amount of growth this year, as the following chart shows:
Furthermore, the pattern of the distribution of earnings growth across the sample set is clearly skewed by the introduction of the National Living Wage.
The following chart illustrates that in 2016 there is a large number of employees receiving no nominal pay increase at all, and a high number receiving increases of less than 2%, but there is a clear quirk in the distribution, in that there is a sharp rise in the trend line between 10% and 11%:
This is an almost perfect reflection of the 10.8% increase from the £6.50 per hour paid under the National Minimum Wage (pre-1st April 2016), to the £7.20 per hour paid under the National Living Wage (from 1st April 2016 onwards).
The effect of the introduction of the National Living Wage is just as clear when considering earnings growth specifically in ASHE 6115.
The following table summarises the change in each percentile:
|
|
Percentile |
||||||||||
|
|
10 |
20 |
25 |
30 |
40 |
50 |
60 |
70 |
75 |
80 |
90 |
|
2015 (revised) |
£6.63 |
£6.98 |
£7.10 |
£7.29 |
£7.72 |
£8.18 |
£8.73 |
£9.44 |
£9.88 |
£10.38 |
£12.21 |
|
2016 (provisional) |
£7.20 |
£7.36 |
£7.50 |
£7.70 |
£8.08 |
£8.51 |
£9.02 |
£9.77 |
£10.20 |
£10.76 |
£12.55 |
|
% change |
8.60% |
5.44% |
5.63% |
5.62% |
4.66% |
4.03% |
3.32% |
3.50% |
3.24% |
3.66% |
2.78% |
Earnings have risen most at the 10th centile, and then steadily less as we move through the centiles. This might reasonably be expected since there will be a large number within the 10th centile that should now, by law, be paid at least £7.20 per hour.
In any event, it is pleasing to have moved back to positive real growth within ASHE 6115.