The share of British workers in low-paid jobs has plunged in the last decade to a record low of 3.4%, a reflection of growing minimum wages, adding to concerns of further inflation ahead.
That’s according to data published Tuesday by the Office for National Statistics, which revealed that the share of employees paid below two-thirds of median hourly earnings — the definition of low-paid work — has tumbled from 21.3% since 2014.
While fewer workers are in low-paid jobs, their finances have still been battered by the surge in inflation that disproportionately affected poorer households who spend more of their income on energy and food. Critics say that a squeeze on the welfare system since 2010 has hurt the finances of families on lower incomes while the number of emergency food bank parcels delivered has climbed to 3.1 million, up from 60,000 over that period.
Meanwhile the proportion of workers in high-paid jobs, defined as earning 1.5 times median earnings, also shrunk in the last decade, from 26% to 22.7%. The figures suggest that incomes in the UK are increasingly bunching up in the middle after the previous government aimed to boost the minimum wage to two-thirds of median earnings.
Britons earning less than £11.39 per hour in 2024 were classified as a low-paid worker while a high-paid worker has a salary of more than £25.63 per hour.
The data was published amid growing concerns among employers over a sharp increase in wages coming. This also comes ahead of expectations that Chancellor Rachel Reeves may raise employer national insurance contributions in Wednesday’s budget to plug a hole in the country’s finances.
The Times newspaper reported that Reeves will announce a boost of more than 6% in the minimum wage for most workers in the budget, coming on top of a near 10% jump in both the previous two years.
The move threatens to fuel inflation with employers expected to pass on the costs, while some business groups have warned of a redundancies tipping point.
Nye Cominetti, principal economist at the Resolution Foundation think tank, said the smaller increase in the minimum wage “is sensible in the context of an expected rise in employer National Insurance contributions at the same time.”
“The Low Pay Commission must continue to monitor the employment effects of a higher minimum wage, including whether firms are switching to self-employed labor to minimise their tax bills and employment rights obligations,” she said.
Separately, the ONS said that the gender pay gap continued to narrow, shrinking to 7% among full-time employees.
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