ONS annual pay and hours figures offer some good news on gender pay gap and pay inequality

The Chartered Institute of Personnel and Development (CIPD) is encouraged by todayís Office for National Statistics (ONS) figures showing that both the gender pay gap and the pay divide between top and bottom earners narrowed slightly in the year to April 2007. But says Dr John Philpott, Chief Economist at CIPD, further and faster progress is needed on both fronts while the ONS figures as a whole show that for most workers pay rises last year lagged well behind increased living costs.

Dr Philpott continued as follows:

Pay squeeze confirmed
ìWhichever way you cut the annual pay survey figures it is clear that the pay of most workers failed to match the surge in price inflation and other living costs in 2006 and early 2007. The median weekly earnings of full-time employees increased by just 2.9% and by only 2.8% on an hourly basis. Part-timers fared better on a weekly basis (enjoying a median increase of 4.7%, with men doing particularly well at 8%) but still only received 3.8% more per hour. This most comprehensive of pay and hours surveys therefore confirms that conditions in the labour market by the start of 2007 were not tight enough to prevent a squeeze on real pay let alone trigger the kind of pay surge that was widely predicted.î

Gender pay gap narrows but progress may have stalled
ìIt is encouraging that the gender pay gap has narrowed on both a median (falling from 12.8% to 12.6%) and mean average (falling from 17.5% to 17.2%) comparison. However, a closer look at the figures suggest no clear trend and if anything indicates that progress in narrowing the gap has stalled since the early part of the decade. This strengthens the imperative for both government and employers to worker harder together to promote genuine gender equality in pay.î

Inequality continues to raise questions of fairness
ìThe rate of pay increases of full-time employees at the bottom of the pay league was for once higher (3.5% for the lowest decile) than that for their equivalents in the ëChampions leagueí positions (2.8% for the highest decile). But for employees as a whole the top per cent of earners still get 4 times more per hour than the bottom ten per cent. This persistent degree of inequality raises questions of social justice and fairness that should exercise the minds of employers and government alike. A necessary first step is to ensure that the almost 300,000 workers being paid less than the National Minimum Wage receive their entitlement. The proportion of workers in this situation (1.2%) has not budged in the past few years and has actually increased in the case of young people aged under 22. It is to be hoped that the strengthened legal enforcement measures contained in yesterdayís Queenís Speech are sufficient to deal with such exploitation.î

Public-Private Sector Pay Gap stable
ìThe substantial median pay gap between full-time workers in the public and private sectors barely changed in the year to April ñ in fact it widened very slightly - a perhaps surprising outcome given recent unrest about the size of public sector pay awards. The median public sector worker earned 60 a week more, (or almost 14% more) more than his or her private sector counterpart in 2006-7. The gap looks set to narrow now that the clamp is being tightened on pay rises for public sector workers. But in considering this issue it is important to bear in mind that in todayís Britain the lowest paid workers are far more likely to be private sector than public sector employees.î