National Minimum Wage

Chapter 2: The Impact of the National Minimum Wage
Figure 2.11: Bite of the Adult National Minimum Wage at the Median for Those Aged 22
and Over, by Firm Size, UK, 1999-2011
Adult National Minimum Wage as a proportion of
median earnings for workers aged 22 and over (per cent)
70
65
60
55
50
45
40
35
30
1999
2000
2001
2002
2003
2004
2005
2006
April of each year
Micro Other small Medium
2007
2008
2009
Large All
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.
Notes:
a. Direct comparisons before and after 2004, and before and after 2006, should be made with care due to changes in the data series.
b. There were fewer responses to the question on size of firm in the 2002 ASHE than in other years.
2.35 Turning to low-paid workers, we observe a similar picture. In order to look at specific groups
of workers, we need to use the LFS earnings data. For those of working age, the bite at the
median is 58 per cent and 94 per cent at the lowest decile. These bites are higher than those
estimated using ASHE (52 per cent and 91 per cent respectively). Figure 2.12 shows that
the bite is highest for those with no qualifications (84 per cent). Women, disabled people,
migrant workers and ethnic minorities all have a higher bite than the working age population.
Most groups saw their bite rise between 2010 and 2011, having seen it fall slightly between
2009 and 2010. Ethnic minorities, however, saw their bite fall between 2010 and 2011, while
the bite for migrant workers has increased every year since 2008. However, grouping all
ethnic minorities together hides variation between them. The bite at the median for Indians
(53 per cent) is unchanged from 2010 and lower than the bite for white people (57 per cent),
whereas for Bangladeshis the bite is significantly higher (78 per cent) but has fallen since
2010.
2010
2011
70
65
60
55
50
45
40
35
30
35