National Minimum Wage

National Minimum Wage
32
Figure 2.8: Annualised Growth in the Adult National Minimum Wage and Median
Earnings for Those Aged 22 and Over, by Sector, UK, 1999-2011
Annualised growth for workers aged 22 and over (per cent)
6
5
4
3
2
1
0
April 1999-April 2011
NMW uprating Low-paying
sector earnings
April 1999-April 2007
Period
Non low-paying
sector earnings
April 2007-April 2011
All earnings
Source: LPC estimates based on ASHE: without supplementary information, April 1999-2004; with supplementary information,
April 2004-2006; and 2007 methodology, April 2006-2011, standard weights, including those not on adult rates of pay, UK.
2.29 This marked difference in earnings growth has led to a divergence in the bite between the
low-paying sectors and the non low-paying sectors. Since 2007, earnings growth in the
low-paying sectors has been 1.3 percentage points lower than the annual increase in the
NMW, so the bite has increased from 74.3 per cent in 2007 to 78.3 per cent in 2011.
In contrast, annual earnings growth since 2007 in the non low-paying sectors has been 0.4
percentage points higher than the annual increase in the NMW. Consequently the bite over
this period fell from 46.0 per cent in 2007 to 45.2 per cent in 2011.
2.30 Figure 2.9 shows that for workers aged 22 and over, the bite in the low-paying sectors has
risen from 67.4 per cent in 1999 to 78.3 per cent in 2011. After a fall in 2010, the bite for the
low-paying sectors increased by 2.4 percentage points in 2011 and re-established its upward
trajectory. In contrast, the bite for the non low-paying sectors has increased more slowly over
the period, rising from 41.9 per cent in 1999 to 45.2 per cent in 2011, below its level in 2007.
6
5
4
3
2
1
0