Pay inequality has soared across London and the South East since 2000

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Wage inequality has soared across London and the South East over the last 13 years according to new TUC analysis published today (Monday) to coincide with the beginning of the TUC’s first Fair Pay Fortnight which runs until Sunday 6 April 2014.

The figures – based on full-time earnings from the Annual Survey of Hours and Earnings (ASHE) – show that between 2000 (when the data was first collected) and 2013 the pay gap between the top 10 per cent and the bottom 10 per cent of earners in London rose by 14 per cent. This is far higher than the national average rise in the pay gap of five per cent over the same period.

A similar picture emerges in the South East where the gap between those on the 90th and 10th percentile of earnings has grown by nine per cent since 2000. The Midlands has also witnessed a significant pay gap increase over the last 13 years, with the pay gap increasing by seven per cent in the West Midlands and by five per cent in the East Midlands.

The TUC analysis reveals that across most of the rest of the country the pay inequality ratio is also rising – up by four per cent between 2000 and 2013 in the North West, three per cent in the East of England, and two per cent in Scotland and the North East.

Only Wales and the South West have seen pay inequality reduce over the last 13 years. However the TUC believes this is more down to top earners not doing as well as in other parts of the UK, rather than those at the bottom getting a better deal.

Comparing the pay gap between the top 90 per cent of earners and those earning a median wage paints a similar picture of rising wage inequality. By this measure inequality has risen by 4.5 per cent across the UK, with the largest rise (8.5 per cent) in London.

The TUC research also reveals how much the top 10 per cent of earners across the UK bring home and how their salaries vary greatly. The highest top earners are in London where they receive £82,000 a year, followed by those in the South East who are on £57,000 and the East of England where they earn about £52,000 per annum.

In contrast, an annual salary of about £46,000 puts workers in the top 10 per cent of earners in Yorkshire and the Humber and £45,000 makes the top 10 per cent in the North East. But it is in Wales where the top earners command the least, about £43,000 a year – nearly half of what those in London are taking home.

Workers on the bottom 10th percentile in London will be earning less than £18,000 a year, less than £15,400 in the South East and less than £14,800 per annum in the rest of England, Scotland and Wales.

TUC General Secretary Frances O’Grady said: “This new analysis shows how wage inequality has soared in parts of the UK over the last decade. This growing pay gap is bad news for our economy and bad news for living standards.

“The picture is particularly bleak in London and the South East, but in areas like the Midlands, the North West and the East of England a significant gulf has developed between top and bottom earners. Unless this trend stops now and more high-skilled jobs with decent pay are created, this worrying pattern is likely to become even more entrenched.

“Everyone must benefit from the recovery, not just those at the top. The TUC wants to see a greater commitment to pay the living wage from both government and employers, a crackdown on excessive executive pay, and modern wages councils which could set higher minimum wages where employers can afford to pay more.

“During Fair Pay Fortnight we’re asking workers to back our call to MPs to get all political parties to put decent pay at the top of their agendas in the run up to the election.”

NOTES TO EDITORS:

- Working people in the UK are seeing their living standards squeezed harder and harder every year, and to highlight this the TUC is organising Fair Pay Fortnight from today (Monday) to a week on Sunday (6 April 2014).

- The Fortnight is part of the TUC’s Britain Needs a Pay Rise campaign and will feature a series of events across England and Wales to raise awareness about low pay, pay inequality and falling living standards. For more information please visit www.fairpayfortnight.org

Pay inequality by region and nation, 2000-13

Nation/ region

10th percentile salary 2000

90th percentile salary

2000

‘Pay inequality ratio’ 2000

10th percentile salary 2013

90th percentile salary

2013

‘Pay inequality ratio’ 2013

Change in inequality ratio between
2000-2013

United Kingdom

10,307

35,863

3.5

14,678

53,720

3.7

5.2%

London

12,967

51,797

4.0

17,938

81,797

4.6

14.2%

South East

11,192

38,578

3.4

15,309

57,490

3.8

8.9%

West Midlands

10,063

32,213

3.2

14,066

48,022

3.4

6.7%

East Midlands

9,667

31,065

3.2

14,000

47,339

3.4

5.2%

North West

10,000

31,864

3.2

14,257

47,141

3.3

3.8%

East

10,521

36,297

3.4

14,524

51,833

3.6

3.4%

Scotland

10,117

33,160

3.3

14,787

49,585

3.4

2.3%

North East

9,706

31,039

3.2

13,806

45,151

3.3

2.3%

Yorkshire and the Humber

9,746

30,996

3.2

14,132

45,633

3.2

1.5%

Wales

9,797

30,270

3.1

14,092

43,240

3.1

-0.7%

South West

9,799

32,843

3.4

14,496

48,016

3.3

-1.2%

 

Source: ASHE 2000 and 2013

- The pay inequality ratio is the number of times more the highest earners are paid compared to the lowest earners.

- The data has been taken from ASHE and the ratios calculated for 90th/10th decile and 90th/median decile in 2000 and 2013. The ‘change in inequality ratio’ column in the above table shows the percentage change between these two pay gaps.

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

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