National Minimum Wage

National Minimum Wage
30
Figure 2.7: Bite of the Adult National Minimum Wage Using Different Earnings
Measures, GB and UK, 2000-2011
Bite (per cent)
55
50
45
40
35
30
2000
2001
2002
2003
2004
2005
2006
April of each year
2007
2008
2009
AWE total pay ASHE median ASHE mean
Source: LPC estimates based on ONS data, AWE total pay (KAB9), GB, average actual weekly hours of work (YBUV), UK, monthly,
seasonally adjusted, 2000-2011, and ASHE: without supplementary information, April 2000-2004; with supplementary information,
April 2004-2006; and 2007 methodology, April 2006-2011, standard weights, including those not on adult rates of pay, UK.
2.25 Table 2.1 shows a similar picture with regards to the bite of the minimum wage across the
whole of the ASHE hourly earnings distribution, such as the lowest decile, the lowest
quartile, the median or the mean. Between the introduction of the minimum wage in 1999
and 2007, the bite at the median increased from about 46 per cent to 51 per cent. From 2007
to 2010, the bite remained just under 51 per cent, before increasing to 51.7 per cent in 2011.
2.26 The bite compared with other points on the distribution follow a similar pattern, increasing
markedly between 1999 and 2007, then remaining stable between 2007 and 2010. According
to ASHE, average hourly earnings in the UK increased by just 0.9 per cent between 2010
and 2011. This was much lower than the increase in the minimum wage (2.2 per cent). Thus,
the bite at the mean has increased in 2011. The increases in the bite in 2011 have occurred
across the whole of the earnings distribution but they have been greater at the bottom end
of the distribution.
2010
2011
55
50
45
40
35
30