National Minimum Wage

National Minimum Wage
22
some extent, reflect the then forthcoming increases to the minimum wage in October 2011,
as some employers may have pre-empted some or all of the increase.
2.5 For the purposes of analysing minimum wage jobs in this section, we define a minimum
wage job to be one that, in April 2011, paid at or below the relevant NMW rate. We also
include those paid up to five pence above the minimum wage. On this basis, we estimate
that about 4.4 per cent of all jobs were minimum wage jobs. Figure 2.1 shows that jobs more
likely to be minimum wage jobs were: part-time; temporary; held for less than a year; in the
private sector; in small and medium-sized firms; and in certain low-paying industries and
occupations.
2.6 Around 9 per cent of jobs that were part-time, temporary, or held for less than a year were
minimum wage jobs, compared with 2-4 per cent of jobs that were full-time, permanent or
held for more than a year. Over 6 per cent of jobs in the private sector but only 1 per cent in
the public sector were paid at or below the minimum wage.
2.7 Figure 2.1 shows that there is a clear relationship between the proportion of minimum wage
jobs and the size of firm. Workers in large firms (those with 250 or more employees) are
much less likely to be paid at or below the minimum wage than those in small firms (those
with fewer than 50 employees), especially micro firms (those with 1-9 employees). Nearly
10 per cent of jobs in micro firms are paid at the minimum wage compared with around 3 per
cent in large firms. Nevertheless, according to ASHE, the majority of minimum wage workers
work in large firms. Around 51 per cent of minimum wage workers work in large firms
compared with around 17 per cent in micro firms and a further 17 per cent in other small
firms (those with 10-49 employees). The remaining 15 per cent work in medium-sized firms
(50-249 employees).
Figure 2.1: Characteristics of Minimum Wage Jobs, UK, 2011
Industry Occupation Firm size Sector Tenure Job type Hours
UK
Part-time
Full-time
Temporary
Permanent
Less than 12 months
More than 12 months
Private sector
Public sector
Micro
Other small
Medium
Large
Low-paying occupations
Non low-paying occupations
0 2 4 6 8 10 12 14
Low-paying industries
Non low-paying industries
0 2 4 6 8 10 12 14
Jobs paying at or below the minimum wage (per cent)
Source: Low Pay Commission (LPC) estimates based on ASHE, 2007 methodology, low-pay weights, including those not on adult rates
of pay, UK, April 2011.
Note: Minimum wage jobs defined as adults (aged 21 and over) earning less than £5.98, youths (aged 18-20) earning less than £4.97,
and 16-17 year olds earning less than £3.69 in April 2011.