Average weekly earnings in Great Britain: February 2020

Estimates of growth in earnings for employees before tax and other deductions from pay.

This is the latest release. View previous releases

This is an accredited national statistic.

Cyswllt:
Email Roger Smith

Dyddiad y datganiad:
18 February 2020

Cyhoeddiad nesaf:
17 March 2020

1. Other pages in this release

Other commentary from the latest labour market data can be found on the following pages:

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2. Main points for October to December 2019

  • Estimated annual growth in average weekly earnings for employees in Great Britain slowed to 2.9% from 3.2% last month for total pay (including bonuses), and to 3.2% from 3.4% for regular pay (excluding bonuses).

  • The annual growth in total pay was weakened by unusually high bonus payments paid in October 2018 compared with more typical average bonus payments paid in October 2019.

  • In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.4%, and annual growth in regular pay is estimated to be 1.8%.

  • In real terms, regular pay is now at its highest level since the series began in 2000, whereas total pay is still 3.7% below its peak in February 2008.

  • Annual growth in total pay remains weakest in the wholesaling, retailing, hotels and restaurants sector at 1.1%, and the manufacturing sector at 2.7%.

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The estimates in this bulletin come from a survey of businesses. It is not possible to survey every business each month, so these statistics are estimates based on a sample, not precise figures.

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3. Analysis of average weekly earnings

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The earnings estimates are not just a measure of pay rises as they also reflect changes in the number of paid hours worked and changes in the structure of the workforce, for example, more high-paid jobs would have an upward effect on earnings growth rates.

The rate of pay growth trended upwards from spring 2017, and in April to June 2019 reached 4.0% for total pay and 3.9% for regular pay, the highest nominal pay growth rates since 2008. However, since then growth has slowed, and in October to December 2019 it dropped to 2.9% for total pay and 3.2% for regular pay. The growth in total pay is impacted downwards by unusually high bonuses having been paid in October 2018, whereas those in October 2019 are at more typical levels.

In real terms (after adjusting for the Consumer Prices Index including owner occupiers' housing costs (CPIH) measure of inflation), annual pay growth has been positive since December 2017 to February 2018 and is now 1.4% for total pay (compared with 1.6% last month) and 1.8% for regular pay (unchanged from last month).

For December 2019, average regular pay, before tax and other deductions, for employees in Great Britain was estimated at £512 per week in nominal terms. The figure in real terms (constant 2015 prices) is £474 per week, which is £1 (0.1%) higher than the pre-economic downturn peak of £473 per week for March 2008.

The equivalent figures for total pay in real terms are £503 per week in December 2019 and £522 in February 2008, a 3.7% difference.

Between October to December 2018 and October to December 2019, average pay growth varied by industry sector:

  • finance and business services saw the highest estimated growth, at 3.7% for total pay and 4.2% for regular pay

  • wholesaling, retailing, hotels and restaurants saw the lowest growth, estimated at 1.1% for total pay and 1.5% for regular pay; this is the sector with the lowest average weekly pay (£340 regular pay compared with £512 across the whole economy)

As these estimates are based on a sample, they are subject to sampling variability, which in the case of wholesaling, retailing, hotels and restaurants is approximately 1.5%. However, it has been evident throughout 2019 that the growth in weekly total pay within this sector is lower than for the whole economy.

It was also the case in two of the first three quarters of 2019 when considered in terms of hourly pay, as observed by the wage cost component of the Office for National Statistics’ (ONS’s) experimental Index of Labour Costs per Hour statistics. This is despite the April 2019 National Living Wage rate and National Minimum Wage rates – which directly affect the lowest-paid employees – being 4.9% higher than in 2018.

Between October to December 2018 and October to December 2019, total pay in the public sector grew by 3.3%, compared with 2.7% in the private sector. This is one of very few periods over a number of years that saw public sector pay growing faster than private sector pay.

In 2010, pay for public sector employees was frozen and between 2013 and 2017, most public sector pay rises were restricted to an average 1%. Between 2010 and December 2019, the difference in average weekly pay between the two sectors fell from an average 6.8% (in favour of the public sector during the 12 months to December 2010) to 1.5%. The latter is similar to the difference that existed pre-2009.

There are differences in the employment and employee profiles between the two sectors, and these change over time, for example, the number of jobs in the public sector fell by over 1 million between September 2009 and September 2019. Understanding the underlying difference in pay and broader remuneration between the two sectors is a complex topic that we have explored, most recently in Public and private sector earnings in the UK based on Annual Survey of Hour and Earnings (ASHE) 2017 data.

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4. Average weekly earnings data

Average weekly earnings
Dataset EARN01 | Released 18 February 2020
Headline estimates of earnings growth in Great Britain (seasonally adjusted).

Average weekly earnings by sector
Dataset EARN02 | Released 18 February 2020
Estimates of earnings in Great Britain broken down to show the effects of changes in wages and the effects of changes in the composition of employment (not seasonally adjusted).

Average weekly earnings by industry
Dataset EARN03 | Released 18 February 2020
Estimates earnings in Great Britain broken down by detailed industrial sector (not seasonally adjusted).

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5. Glossary

Average Weekly Earnings

Average Weekly Earnings (AWE) is the lead monthly measure of average weekly earnings per employee. It is calculated using information based on the Monthly Wages and Salaries Survey (MWSS), which samples around 9,000 employers in Great Britain.

The estimates are not just a measure of pay rises as they do not, for example, adjust for changes in the proportion of the workforce who work full-time or part-time, or other compositional changes within the workforce. The estimates do not include earnings of self-employed people.

Estimates are available for both total pay (which includes bonus payments) and for regular pay (which excludes bonuses). Estimates are available in both nominal terms (not adjusted for inflation) and real terms (adjusted for inflation).

Bonus

A bonus is a form of reward or recognition granted by an employer. When an employee receives a bonus payment, there is no expectation or assumption that the bonus will be used to cover any specific expense. The value and timing of a bonus payment can be at the discretion of the employer or stipulated in workplace agreements.

Consumer Prices Index including owner occupiers’ housing costs (CPIH)

As of 21 March 2017, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) became our lead measure of inflation. It is our most comprehensive measure of UK consumer price inflation.

Monthly Wages and Salaries Survey (MWSS)

A survey through which we collect information on wages and salaries. It is distributed monthly to around 9,000 employers covering around 12.8 million employees.

A more detailed Glossary is available.

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6. Measuring the data

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our labour market statistics in line with the UK Statistics Authority’s (UKSA’s) Code of Practice for Statistics and in accordance with International Labour Organization (ILO) definitions and agreed international statistical guidance.

This bulletin relies on data collected from the Monthly Wages and Salaries Survey, a survey of employers in Great Britain excluding small businesses employing fewer than 20 people.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Average weekly earnings QMI.

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7. Strengths and limitations

The figures in this bulletin come from a survey of businesses, which gathers information from a sample rather than from the whole population. The sample is designed to be as accurate as possible given practical limitations such as time and cost constraints. Results from sample surveys are always estimates, not precise figures. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.

As the number of people available in the sample gets smaller, the variability of the estimates that we can make from that sample size gets larger. Estimates for small groups (for example, earnings for the construction sector), which are based on quite small subsets of the Monthly Wages and Salaries Survey sample, are less reliable and tend to be more volatile than for larger aggregated groups (for example, earnings for the private sector).

In general, short-term changes in the growth rates reported in this bulletin are not usually greater than the level that can be explained by sampling variability. Short-term movements in reported rates should be considered alongside longer-term patterns in the series and corresponding movements in other sources to give a fuller picture.

Further information is available in A guide to labour market statistics and A guide to sources of data on earnings and income.

Changes implemented this month

Since the January UK labour market release, the seasonal adjustment parameters used to calculate average weekly earnings (AWE) estimates have been reviewed. This is an annual process, as outlined in the Average weekly earnings QMI. The full historical AWE time series has been open to seasonal adjustment revisions, which have been applied to the estimates in this February bulletin.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Roger Smith
labour.market@ons.gov.uk
Ffôn: +44 (0)1633 456120