National Minimum Wage

National Minimum Wage
28
Figure 2.5: Increases in the Real and Relative Value of the Adult National Minimum
Wage, UK, 1999-2011
Uprated value of National Minimum Wage (£ per hour)
6.20
5.80
5.40
5.00
4.60
4.20
3.80
3.40
1999 April
1999 October
2000 April
2000 October
2001 April
2001 October
2002 April
2002 October
2003 April
2003 October
2004 April
2004 October
2005 April
2005 October
Month
2006 April
2006 October
2007 April
2007 October
2008 April
2008 October
2009 April
2009 October
2010 April
2010 October
Adult NMW GDP AWE total pay RPI CPI
68.9%
6.20
5.80
66.7%
£5.60
55.6%
44.1%
31.0%
2011 April
2011 October
£6.00
5.40
£5.19
5.00
£4.71
4.60
Source: LPC estimates based on ONS data, AEI including bonuses (LNMQ), 1999, AWE total pay (KAB9), 2000-2011, CPI (D7BT), 1999-
2011, and RPI (CHAW), 1999-2011, monthly; and nominal GDP (YBHA), 1999-2011, quarterly, seasonally adjusted (AWE, AEI and GDP
only), UK (GB for AWE and AEI).
Note: The AWE series began in January 2000 and the AEI series ended in July 2010. Our earnings series is estimated using AEI
(including bonuses) from April 1999-January 2000 and AWE (total pay) from January 2000-October 2011.
2.22 However, most of the real and relative increases in the minimum wage occurred as a result
of the comparatively large upratings from October 2001-October 2006. Since that time, the
adult rate of the minimum wage has risen more or less in line with average earnings but has
lagged price increases. The minimum wage increased by 13.6 per cent between October
2006 and October 2011. This compares with increases of 13.2 per cent in average earnings
and higher rises of 17.2 per cent in CPI and 18.8 per cent in RPI.
2.23 Between April 2000 and April 2011, as shown in Figure 2.6, average earnings grew by around
47 per cent whether measured using AWE total pay or median hourly earnings from ASHE.
In more recent years (between April 2007 and April 2011), the growth in ASHE median hourly
earnings (9.4 per cent) has also matched the growth in AWE (9.5 per cent). However, in
April 2011, the average and median hourly earnings growth in ASHE was considerably lower
(0.9 per cent and 0.4 per cent respectively) than the growth in AWE (2.0 per cent).
4.20
3.80
3.40