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Four Decades of UK Wage Changes

Four Decades of UK Wage Changes


There is often talk about differences in pay due to the region of the UK that you live in, whether you are male or female and where the highest paying jobs can be found. Thanks to research by the Office for National Statistics there are now some clear answers to all of those pay related questions, and how pay has changed over the past four decades.

Due to the rate of inflation over the years this research was carried out after adjusting the amount that people were paid in previous decades up to the 2013 equivalent. This meant that comparisons could be made fairly and it also makes it easier for us readers to see exactly how much the rate of pay has changed!

When looking at how much difference there is between the pay of those who were working at the age of 21 in 1975 and those who were working at the age of 21 in 1995 it is very apparent that those in the 1995 group were earning a lot more money. The research shows that they were, in fact, earning 40% more which means that those in the 1975 group would have to work for 5-6 years longer in order to earn the same amount. In 1975, the average pay for a 21 year old was 94p an hour, which is the equivalent of £5.49 per hour in 2013, whereas those aged 21 in 1995 earned an average of £4.48 per hour, the equivalent of £6.57 in 2013.

Another pay fact which has changed over the years is the age at which individuals earn the most money. In 1975 people were getting paid the most in their late 20s with 29 being the age at which people were earning the most, an average of £7.09 per hour in 2013 prices. In 2013 it was people in their late 30s earning the most and peaking at age 38 on an average pay of £13.93 per hour.

When you look at what people were earning in 2009 compared to 2013 you can see that pay was at a peak in 2009 before the economic downturn affected earnings. Every age group got paid more in 2009 than 2013 and 28 years olds were earning 17.6% more in 2009 than 2013 on average. People in their 20s have been the most affected by the economic downturn overall as their average pay has fallen by 12%, those in their 30s are being paid 9% less on average and people in their 50s have had the smallest change through getting paid 5% less on average than those in 2009.

There are a couple of differences between the pay of males and females in 2013. The first being that the amount that males earn increases further along the age range than it does for females. The ONS report suggests are a few reasons why this could be, including the possibility of females changing to part time hours to accommodate family life.

Although the difference between the amount that males and females get paid has decreased dramatically since 1975, it is still apparent that men are still getting paid more than women after the age of 30 and by the age of 49 men are earning 45% more than women. However, in 1975 men starting earning more than women from the early age of 18 and by the age of just 38 they were earning a massive 61% more on average!

It probably will not come as a shock to you that the UK region with the highest average hourly pay is London which is followed by the South East in second place at £15.84 per hour and £12.10 per hour respectively. The region with the lowest hourly pay is Northern Ireland with an average hourly pay of £10.19 per hour. Almost a third of the top 10% of earners in the UK worked in London in 2013 and 12.3% out of the bottom 10% of earners worked in the North West in 2013 which falls in line with the North/South divide that still seems to be apparent. One factor in this is that there are a lot of big finance companies in London which offer highly paid jobs which will have an effect on the averages.

You can read the full report from the Office for National Statistics here: http://www.ons.gov.uk/ons/rel/lmac/uk-wages-over-the-past-four-decades/2014/rep---uk-wages-over-the-past-four-decades.html#tab-UK-Wages-Over-the-Past-Four-Decades

By Sasha Davison



3rd July 2014

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