Latest Public Sector News

07.11.12

Employees earn 62% more in real terms than in 1986

A report released by the Office for National Statistics (ONS) has illustrated that full-time employees were on average 62% better off in 2011 than in 1986, even accounting for inflation.

The average wage in the UK has rocketed from £3.87 per hour in 1986 to around £12.62 per hour in 2011 – a staggering increase even in consideration of price increases over that period of time.

Nevertheless, this increase has not been equally spread across the scale. The report demonstrates that the higher earners have done better, with the top 10% receiving an increase of 81%, whilst the bottom 10% obtained a 47% increase.

However, the introduction of the minimum wage in 1998 has ensured that those at the very bottom have seen a more significant increase of 51%.

Clearly the recession has made an important impact on the results of the report. During the years 2007-2011, earnings across the scale decreased and wage growth was unable to keep up with price rises. This is in contrast to the recession of the early 90s, when real wage growth was encouraging for all.

ONS’ report also highlights the issue of wage inequality, which is at its most prominent in London due to the abundance of jobs in the financial sector in the capital. The report additionally showed that over one in three of the highest paid jobs are located in London. The lowest level of wage inequality was in Wales.

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Comments

Edward Harkins   07/11/2012 at 16:55

That 62% increase since 1986 does, of course, has no relationship or bearing on the exorbitant increase that top UK executives have been creaming off - probably the figure fro that cohort runs into hundreds of a %age. Whilst this article touches on inequality it fails to address this real and growing heart of dysfunctional inequality in income and wealth in the UK (more extreme in only the USA among comparable economies)

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