Work has changed fundamentally since the 1980s and continues to do so at a pace. The traditional big coal, steel and shipping industries have gone, the 24 hour gig economy is with us, we now have to work until we are older, we’ve said goodbye to final salary pensions, and changes in technology and working culture mean that more is demanded of us with a much faster pace of work (longer operating hours, shorter deadlines, more scrutiny and control, and less job security). On the plus side…more women now work, we’ve seen a growth in part time work, maternity and paternity rights, flexible working practices, home working, the working time directive and improved health and safety.
To be more specific, April the 1st saw the introduction of the new national minimum wage (NMW) rates. For the over 25s the increase was 30p an hour (from £7.20 to £7.50), with 15p for the under 21s to 24s (£6.95 to £7.05) and a modest 5p per hour for the 18s to 20s (£5.55 to £5.60) and 16-17s (£4.05). Apprentices now receive £3.50 an hour.
This is good news…
The Low Pay Commission estimated that this will give a wage increase to around 2.3 million workers. But the last ONS figures in April 2016 estimated that there were still 362,000 jobs that paid less than the minimum wage. Reasons for this include for example, an employer providing accommodation can offset the hourly rate paid against this as well as non-compliance. Women and young people under 18 are most likely not to be paid the minimum wage.
Analysis shows that the minimum wage has increased in real terms over time (and particularly has benefited women who are more likely to be at the bottom end of the wage scale). The increase in the minimum wage has helped the lowest paid see a real growth in their hourly pay and even taking inflation into account, the adult rate of the minimum wage is at its highest ever value.
Even better, the introduction of the minimum wage has seen a positive trend for other low paid workers. It has produced a ‘ripple up effect’ where we have seen better than average pay growth for the bottom quarter of workers (not just the very low paid) where others workers earning up to £9 a hour have benefited.
Unfortunately, the news isn’t so rosy for the other 75% of better paid workers.The Low Pay Unit estimates that hourly pay for them won’t surpass pre-recession peaks until the end of 2019.
Although the introduction of the minimum wage has benefited many low paid workers, some industries are particularly poor at paying it. The hairdressing sector has the greatest percentage of jobs paid below the minimum wage (7%) followed by the childcare (4%), hospitality (3.8%) and cleaning industry (3.7%). Neither has the minimum wage solved the problem of poverty – many people (and especially children) classified as living in poverty are in a household where someone works. Cost of living increases and cuts to in-work and other benefits doesn’t improve their overall situation. The ‘living wage’ takes cost of living and other changes into account. This is calculated as £9.75 an hour in London and £8.45 an hour in the rest of the country. For a full time employee working a 35 hour week, the minimum wage falls short of the living wage by £1,729 a year.
Pay levels vary across sectors and occupations. The occupation group with the highest median weekly earnings for full-time employees was managers, directors and senior officials (£798). Caring, leisure and other service occupations were the lowest paid group, at £353 per week. A huge differential and yet these are the lowest paid occupations that have seen the largest percentage increases. The caring, leisure and other service occupations and elementary occupations both grew by 3.4% in 2016 compared with 1.7% for managers, directors and senior officials. A long way to go but at least progress in the right direction.
When looking at the gender pay gap for full-time employees across different occupations, men earn more than women in all the main occupation groups. This ranges from 3.9% more for sales and customer service occupations to 25.1% for skilled trades occupations.
What about trends in working hours?
Since the introduction of the working time directive in the late 1990s, employees aren’t supposed to work more than 48 hours a week on average (averaged out over 17 weeks) unless they have opted out of the directive. Workers should get a 20 minute break if they work longer than 6 hours, one day off each week, 11 consecutive hours’ rest in any 24-hour period and there’s a limit on the normal working hours of night workers to an average eight hours in any 24-hour period.
The trend shows a decrease in the mean average number of total paid hours per week for full-time employees from 40.0 hours in 1997 to 39.2 hours in 2016. Full time male workers have seen the biggest decrease in paid hours worked (41.5 total paid hours in 1997 compared to 40.2 total paid hours in 2016) while full-time women’s total paid hours have remained at around 37.1 – though they slightly increased to 37.6 between 2015 and 2016.
When Trajectory published its Time Use Report last year, we found that during the week paid work dominated our lives – though even at its peak no more than half of people are working at any one time.
Interestingly, in the UK we were the latest people in Europe to start work – it took until 8.30am for a quarter of adult Brits to be working. Yet we were far less likely than employees in France, Italy or Spain to stop working at lunch time. A key difference was that a third of the UK sample worked part time – more than any other country in the study. Yet despite differences in working hours and patterns, 84% of adults in the UK said they are sometimes or always ‘rushed’. Brits who had a high level of satisfaction with their level of leisure time tended to work on average an hour less a day.
The dominance of time pressure and the apparent lack of a lunch break meant that working throughout the day means we feel busier, even if we end up doing less.
This leads on to the question of how much do we like work and is this changing over time. In the last British Social Attitudes survey, 62% of respondents said they would enjoy having a job even if they didn’t need the money. This was up from 49% in 2005 indicating that people valued their work beyond its financial benefit. More people said that they had a good quality job. 71% of workers said they had a ‘good’ job compared with 57% in 1989. But stress at work had increased significantly. 37% of workers said they experience stress “always” or “often”, compared with 28% in 1989.
In answer the question, is work getting any better? My first graduate job was 9 to 5.30, an hour for lunch, 20 days holiday and today’s equivalent salary of £11,000 – so less than the minimum wage would pay a 22 year old today. But there was probably a final salary pension scheme and it took at least a day to respond to a memo left in a pigeon hole, a week to a posted enquiry and no emails to look at outside of office hours …