UK earnings figures show fastest rise for low-paid

Pay inequality in the UK narrowed between April 2015 and April 2016, according to figures released on Wednesday by the Office for National Statistics (ONS).

Provisional data reveals that weekly earnings for full-time workers were 2.2% higher in April 2016 compared to a year earlier, or 1.9% after inflation. Part-time workers saw a 6.6% increase.

Pay rose at its joint highest rate since the financial crisis, driven by wage rises in the private sector. Median weekly earnings for full-time employees in the private sector were up 3.4% year-on-year, compared with a 0.7% rise in the public sector.

Overall, the lowest paid workers saw their earnings rise by as much as 6.2%, while high earners saw a 2.5% increase. This suggests a narrowing of the gap between those at the bottom of the pay scale and those at the top.

The pay gap between men and women has also continued to shrink.

The figures were welcomed by the Resolution Foundation, which said that the National Living Wage has had a significant impact on the distribution of pay growth.

But the think-tank also warned that the outlook for the coming years has weakened significantly since the EU referendum due to lower than expected nominal pay growth and higher inflation.

What’s more, typical earnings are still 6.8% lower than before the financial crisis.

Laura Gardiner, senior policy analyst at the Resolution Foundation, said:

“The introduction of the National Living Wage has well and truly made its mark on pay across Britain. The new wage floor has contributed to a significant closing of the gender pay gap and a welcome fall in pay inequality.

“But while 2016 has been the strongest year for pay in over five years, we may not see this level of growth again this parliament given the outlook for lower earnings growth and higher inflation in the wake of the Brexit vote.

“It’s encouraging to see pay finally recovering after a long and painful squeeze, but with the pace of recovery set to slow it could be another decade before we see a return to pre-crash pay levels.”