Pay inequality 'has soared' in London and south east

Published on Monday, 24 March 2014 10:35
Written by Govtoday staff

Wage inequality has soared across London and the south east over the last 13 years according to new TUC analysis published today to coincide with the beginning of the TUC's first Fair Pay Fortnight which runs until Sunday 6 April.

The figures - based on full-time earnings from the Annual Survey of Hours and Earnings (ASHE) - show that between 2000 (when the data was first collected) and 2013 the pay gap between the top 10% and the bottom 10% of earners in London rose by 14%. This is far higher than the national average rise in the pay gap of five per cent over the same period.

A similar picture emerges in the south east where the gap between those on the 90th and 10th percentile of earnings has grown by 9% since 2000. The midlands has also witnessed a significant pay gap increase over the last 13 years, with the pay gap increasing by seven per cent in the West Midlands and by 5% in the East Midlands.

The TUC analysis reveals that across most of the rest of the country the pay inequality ratio is also rising - up by 4% between 2000 and 2013 in the north west, 3% in the east of England, and 2% in Scotland and the north east.

Only Wales and the south west have seen pay inequality reduce over the last 13 years. However the TUC believes this is more down to top earners not doing as well as in other parts of the UK, rather than those at the bottom getting a better deal.

Comparing the pay gap between the top 90% of earners and those earning a median wage paints a similar picture of rising wage inequality. By this measure inequality has risen by 4.5% across the UK, with the largest rise (8.5%) in London.

The TUC research also reveals how much the top 10% of earners across the UK bring home and how their salaries vary greatly. The highest top earners are in London where they receive £82,000 a year, followed by those in the south east who are on £57,000 and the east of England where they earn about £52,000 per annum.

In contrast, an annual salary of about £46,000 puts workers in the top 10 per cent of earners in Yorkshire and the Humber and £45,000 makes the top 10% in the north east. But it is in Wales where the top earners command the least, about £43,000 a year – nearly half of what those in London are taking home.

Workers on the bottom 10th percentile in London will be earning less than £18,000 a year, less than £15,400 in the south east and less than £14,800 per annum in the rest of England, Scotland and Wales.

TUC general secretary Frances O'Grady said: "This new analysis shows how wage inequality has soared in parts of the UK over the last decade. This growing pay gap is bad news for our economy and bad news for living standards.

"The picture is particularly bleak in London and the south east, but in areas like the midlands, the north west and the east of England a significant gulf has developed between top and bottom earners. Unless this trend stops now and more high-skilled jobs with decent pay are created, this worrying pattern is likely to become even more entrenched.

"Everyone must benefit from the recovery, not just those at the top. The TUC wants to see a greater commitment to pay the living wage from both government and employers, a crackdown on excessive executive pay, and modern wages councils which could set higher minimum wages where employers can afford to pay more.

"During Fair Pay Fortnight we're asking workers to back our call to MPs to get all political parties to put decent pay at the top of their agendas in the run up to the election."

Source: TUC

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