The Annual Survey of Hours and Earnings (ASHE) is conducted in the UK each April. It serves as the most comprehensive source of information about the structure and distribution of earnings across the country. This survey delves into the depths of the UK workforce, providing invaluable insights into the levels, distribution and composition of earnings, as well as paid hours worked. ASHE captures data across various industries, occupations and demographics, offering an in depth understanding of the UK's labour market.
The ASHE data, derived from a 1% sample of employee jobs and employing HM Revenue and Customs Pay As You Earn (PAYE) records, is a crucial tool for policymakers and economists to understand and address the nuances of the labour market.
In the most recent analysis of the ASHE data by the Office for National Statistics (ONS), the median weekly earnings for full-time employees in April 2023 demonstrated a significant surge, reaching £682, marking a notable 6.2% increase compared to the figure reported in April 2022 (£642). This spike in earnings growth represents the highest recorded rate since the commencement of comparable records in 1997, pointing to a promising trajectory for the UK's workforce.
However, a deeper dive into the ASHE findings reveals a different narrative. While nominal median weekly earnings witnessed a significant boost, the real terms data - adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH) - presented a contrasting picture. The report disclosed a 1.5% decline in the real terms median weekly earnings for full-time employees in April 2023 compared to the previous year, indicating a potential discrepancy between nominal earnings growth and the impact of inflation on employees' purchasing power. Both full-time and part-time employees experienced a decrease in real earnings over the year, underscoring the challenges posed by inflation on the UK workforce.
Moreover, the report highlighted distinct patterns in earnings growth across different occupational groups. The data showed a substantial uptick in earnings for lower-paying occupations, with caring, leisure and other service occupations experiencing a 9.4% surge and sales and customer service occupations witnessing a 9.2% rise compared to the previous year. Conversely, the associate professional and technical occupations group displayed the smallest increase at 3.2%, indicating a potential need for targeted interventions to address wage disparities across occupational categories.
Furthermore, the ASHE analysis brought attention to the divergence between the private and public sectors in terms of earnings growth. While the private sector exhibited a robust 7.7% annual percentage growth in median weekly earnings for full-time employees, the public sector recorded a comparatively modest 3.7% growth.
Notably, the gender pay gap, a longstanding concern in the UK labour market, demonstrated a gradual but persistent decline over the years. The ASHE report disclosed a 9.1% increase in median weekly earnings for women, outpacing the 6.8% growth observed among men. Despite these gains, the gender pay gap still persists, with women earning £491 per week compared to men's £666, representing a gender pay gap of 7.7% in April 2023. Notably, the analysis pointed to a significant discrepancy in the gender pay gap across different age groups, indicating the need for targeted policies to address this disparity among employees aged 40 years and over versus those aged under 40 years.
The findings from the ASHE report provide critical insights into the complex dynamics of earnings growth and gender pay disparities within the UK labour market. While the record-breaking increase in median weekly earnings offers a promising outlook, the persistence of the gender pay gap and the challenges posed by inflation emphasise the need for continued efforts to promote equitable remuneration and ensure the financial well-being of all employees across various occupational groups and sectors.
