Other commentary from the latest labour market data can be found on the following pages:Nôl i'r tabl cynnwys
Annual growth in employee pay continued to strengthen as more employees returned to work from furlough, but pay growth was still subdued as some workers remained furloughed and employers were paying less in bonuses.
Growth in average total pay (including bonuses) among employees for the three months July to September 2020 increased to 1.3%, and growth in regular pay (excluding bonuses) increased to 1.9%.
Growth in both total pay and regular pay during July to September was higher than inflation.
During the early summer months, the industry sectors accommodation and food services and construction had seen the largest falls in pay, down more than 10% in April to June; in July to September, both recovered some loss although their average total pay growth remained down, at negative 1.8% and negative 3.9% respectively.
The reported number of jobs being paid through payroll (which includes furloughed jobs) was lower than a year ago; the composition of these jobs can impact average pay growth, for example, a loss of lower-paid jobs will inflate average pay.
Although the reported number of jobs has fallen in some low-paying industries, it has risen in others; at whole economy level the net impact of job number changes by industry accounts for only 0.1% of the 1.3% and 1.9% growths reported earlier.
Average pay growth in accommodation and food services, administration and support, and arts and entertainment appear most likely to be impacted by changes in job composition by occupation; these three industries saw the largest percentage falls in reported number of employees being paid in June to September 2020 compared with a year earlier.
In July to September 2020, the rate of annual pay growth was positive 1.3% for total pay and positive 1.9% for regular pay. The difference between the two measures is because of subdued bonuses, which fell by an average of negative 10.7% in the three months to September 2020.
The rate of total and regular pay growth had stood at 2.9% in December 2019 to February 2020, immediately prior to any impact from the coronavirus (COVID-19) pandemic was seen. It then slowed sharply in April to June 2020 to negative 1.2% for total pay and negative 0.1% for regular pay before some increases in July, August and September.
In real terms, total pay in July to September grew at a faster rate than inflation, at positive 0.5%, and regular pay growth in real terms was also positive, at 1.2%.
For September 2020, average total pay, before tax and other deductions, for employees in Great Britain was estimated at £553 per week in nominal terms. When expressed in real terms (constant 2015 prices), the figure in September 2020 was £509 per week, notably higher than the £488 per week estimated in June 2020.
Average regular pay was estimated at £523 per week in nominal terms. When expressed in real terms (constant 2015 prices), the figure in September 2020 was a record £481, after having fallen back to £464 per week in April 2020.
Between July to September 2019 and July to September 2020, average pay growth varied by industry sector (Figure 3). The public sector saw the highest estimated growth in total pay, at 3.7%. Negative growth was seen in the construction sector, estimated at negative 3.9%; the wholesaling, retailing, hotels and restaurants sector, estimated at negative 0.5%; and manufacturing at negative 0.2%. This is, however, an improvement on the growth rates during April to June 2020, especially in construction and accommodation and food services (which sits in the wholesaling, retailing, hotels and restaurants grouping), which had seen falls of more than 10%.
The pattern of pay growth is closely linked to the proportion of employees who are furloughed and the extent to which employers have topped up payments received for these employees under the Coronavirus Job Retention Scheme (CJRS). The Office for National Statistics (ONS) has published estimates of approximately 9% of the workforce on partial or full furlough leave during 7 to 20 September 2020, with the arts, entertainment and recreation sector and the accommodation and food service activities sector having the highest proportions of furloughed workers, at 32% and 27% respectively. There has been a steady reduction in number of furloughed employee jobs since early summer.
Changes in the number of employees across industries can create a compositional effect on pay growth at the whole economy level; a decrease in employee numbers in industries that have a lower average pay can have an upward effect on pay growth, and vice versa. Employment numbers returned to the Monthly Wages and Salary Survey (MWSS) in July to September 2020 were lower than a year earlier, contributing a compositional effect of positive 0.1% on whole economy pay growth; that is, if the profile (percentage within each industry) of employee jobs had not changed between July to September 2019 and July to September 2020, the estimates of growth in total pay and regular pay would have been 0.1% lower than reported in this bulletin.
The dynamic of this can be understood from Figure 4, which shows the percentage growth or fall in number of paid employees by industry, reported on the MWSS. The three dots furthest to the left of Figure 4 represent administration and support services, accommodation and food services, and arts and entertainment, which reported employee numbers that had fallen by the highest percentage since the same period in 2019. Although these industries have lower-than-average weekly pay, the impact on whole economy pay was largely offset by an increase in employees in another low-paying industry (health and social care, which is one of the largest-employing industries) and employee falls in higher-paid industries such as professional, scientific and technical services, financial and business services, and information and communications.
There are additional sources of estimates of number of jobs within industries. Most notable is the workforce jobs series, which has been published for June 2020 and on 15 December will be updated to cover September. It shows a similar pattern of job changes to the one presented in Figure 4.
Job growth estimates can also be impacted by changes in the types of job (for example, occupation or full-time versus part-time status) within industries. The ONS’s Employee earnings in the UK and Low and high pay in the UK bulletins provide insights into the profile of jobs and job holders that were most impacted in April 2020 at the start of the coronavirus measures, in particular a much higher incidence of furloughing among the lowest-paid part-time jobs. Analysis of job inflows and outflows in HM Revenue and Customs’ (HMRC’s) Earnings and employment from Pay As You Earn Real Time Information, UK: October 2020 suggests a possible reduction in lower-paid jobs in recent monthsNôl i'r tabl cynnwys
Average weekly earnings
Dataset EARN01 | Released 10 November 2020
Headline estimates of earnings growth in Great Britain (seasonally adjusted).
Average weekly earnings by sector
Dataset EARN02 | Released 10 November 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 10 November 2020
Estimates of earnings in Great Britain broken down by detailed industrial sector (not seasonally adjusted).
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 regular pay (which excludes bonuses). Estimates are available in both nominal terms (not adjusted for inflation) and real terms (adjusted for inflation).
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
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
The MWSS is 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.Nôl i'r tabl cynnwys
The survey response rate was 78%, slightly lower than the 83% target in more typical months.
In line with international guidance, the seasonal adjustment process has been reviewed and revised this month, with all periods in the Average Weekly Earnings (AWE) series open to revision.
For more information on how labour market data sources are affected by the coronavirus pandemic, see the article published on 6 May 2020 which details some of the challenges that we have faced in producing estimates at this time.
Our latest data and analysis on the impact of the coronavirus pandemic on the UK economy and population are available on our dedicated coronavirus web page. This is the hub for all special coronavirus-related publications, drawing on all available data. In response to the developing coronavirus pandemic, we are working to ensure that we continue to publish economic statistics. For more information, please see COVID-19 and the production of statistics.
In April, potentially significant changes in employee pay, associated with social distancing measures, made it necessary to change some aspects of the processing of AWE data. The normal approach to processing both non-responding companies and those whose pay shows sharp unconfirmed changes from historical returns is to roll forward (impute) employee and pay details from the most recent responding month. Since April, we have conducted additional data validation.
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 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 (MWSS), 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.
|Including bonuses |
(Jan to Apr)¹ ²
|Including bonuses |
(May to Dec)¹ ²
|Whole economy||± 0.9||± 0.5||± 0.5|
|Private sector||± 0.9||± 0.6||± 0.5|
|Public sector||± 0.9||± 0.5||± 0.5|
|Services||± 1.0||± 0.6||± 0.5|
|Finance and |
|± 2.8||± 1.6||± 1.4|
|Public sector excluding |
|± 0.7||± 0.5||± 0.5|
|Manufacturing||± 1.1||± 1.0||± 0.9|
|Construction||± 2.5||± 2.6||± 2.4|
|Wholesale and retail, |
hotels and restaurants
|± 2.1||± 1.7||± 1.5|
Download this table Table 1: Sampling variability for average weekly earnings single month growth rates (percentage points).xls .csv
The figures in this bulletin come from a survey of businesses that 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 small subsets of the Monthly Wages and Salaries Survey (MWSS) 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.Nôl i'r tabl cynnwys
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