National Minimum Wage

Chapter 2: The Impact of the National Minimum Wage
Figure 2.9: Bite of the Adult National Minimum Wage for Workers Aged 22 and Over, by
Low-paying Sector, UK, 1999-2011
Adult National Minimum Wage as a proportion of median
earnings for workers aged 22 and over (per cent)
100
90
80
70
60
50
40
30
20
10
0
Agriculture
Food processing
Textiles
Retail
Hospitality
Security
Cleaning
Sector
Source: LPC estimates based on ASHE: without supplementary information, April 1999-2003; with supplementary information,
April 2004-2005; and 2007 methodology, April 2006-2011, standard weights, including those not on adult rates of pay, UK.
Note: Definitions for the low-paying sectors are based on Standard Industrial Classification (SIC) codes. Data from 1999-2007
are based on SIC 2003 codes. Data from 2008-2011 are based on SIC 2007 codes. Because of this change in methodology direct
comparisons before and after 2007 should be made with care.
2.31 Within the low-paying sectors there is some variation in the level and trend of the bite over
time, but the bite has broadly increased year-on-year in every low-paying sector. In 2011,
the cleaning sector had a bite of over 90 per cent, and a further three sectors, hairdressing,
childcare and hospitality had bites of over 80 per cent.
2.32 Figure 2.10 shows a similar story by firm size. Over the whole period from 1999 to 2011,
firms of all sizes have seen broadly the same annualised earnings growth of about 3 per cent.
Between 1999 and 2007, micro and other small firms saw slightly higher earnings growth
compared to medium and large firms. However, since 2007, micro and other small firms have
seen a much lower annual growth in earnings, compared with both larger firms and the
uprating in the NMW. This has increased the bite for smaller firms by more than for larger
firms in recent years.
Social care
Childcare
Leisure
Hairdressing
Employment agencies
Low-paying sectors
Non low-paying sectors
Total
100
90
80
70
60
50
40
30
20
10
0
33