The Minimum Wage, the National Living Wage and the Living Wage Foundation
Table 3.1
| Year | REAL
LIVING WAGE |
NATIONAL
LIVING WAGE |
NATIONAL MINIMUM WAGE | |||
| By April | Living Wage | (23 and over) | 21 to 22 | 18 to 20 | Under 18 | Apprentice |
| 2023 | £10.90 | £10.42 | £10.18 | £7.49 | £5.28 | £5.28 |
| 2022 | £9.90 | £8.91 | £9.18 | £6.83 | £4.81 | £4.81 |
| 2021 | £9.50 | £8.91 | £8.36 | £6.56 | £4.62 | £4.30 |
| To April 2020 | Living Wage | (25 and over) | 21+ /21 to 24** | 18 to 20 | Under 18 | Apprentice |
| 2020 | £9.30 | £8.72 | £8.20 | £6.45 | £4.55 | £4.15 |
| 2019 | £9.00 | £8.21 | £7.70 | £6.15 | £4.35 | £3.90 |
| 2018 | £8.75 | £7.83 | £7.38 | £5.90 | £4.20 | £3.70 |
| 2017 | £8.45 | £7.50 | £7.05 | £5.60 | £4.05 | £3.50 |
| 2016 | £8.25 | £7.20 | £6.70 | £5.30 | £3.87 | £3.30 |
| 2015 | £7.85 | n/a | £6.70 | £5.30 | £3.87 | £3.30 |
| 2014 | £7.65 | n/a | £6.50 | £5.13 | £3.79 | £2.73 |
| 2013 | £7.45 | n/a | £6.31 | £5.03 | £3.72 | £2.68 |
| 2012 | £7.20 | n/a | £6.19 | £4.98 | £3.68 | £2.65 |
| 2011 | n/a | n/a | £6.08 | £4.98 | £3.68 | £2.60 |
| Sources:
· Real Living Wage – Living Wage Foundation (Oct 2022) · National Living Wage and Minimum Wage – Low Pay Commission via Gov.uk (Nov 2022) *For simplicity, the table shows that these rates are likely to be in place by April that year, but please note: · The Real Living Wage is announced in November and recommended to be implemented within 6 months, · The National Living Wage is announced at Autumn Statement but must be implemented in April the following year · The National Minimum Wage is announced at Autumn Statement and must be backdated to October the same year. **The 21-24 age category came into effect in October 2015, once the National Living Wage was introduced for those aged 25+. In April 2021, the age threshold was lowered from 25 to 23 years old. |
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In April 2016 the government introduced a higher minimum wage rate for all staff over 25 years of age (reduced to over 23 years in 2021) and call this the ‘National Living Wage’. However, the government’s ‘National Living Wage’ is different to the ‘Real Living Wage’ set by the Living Wage Foundation.
The government’s National Living Wage and National Minimum Wage rates are set by the Low Pay Commission. The UK’s Real Living Wage rate is set annually by the Living Wage Foundation and calculated by the Centre for Research in Social Policy at Loughborough University (and is informed by the Minimum Income Standard). The figure is announced every November and employers are advised to implement the new rates within 6 months of the announcement.
The National Living Wage and National Minimum Wage set by government are compulsory for employers while the Real Living Wage is voluntary. The government rate is based on median earnings while the Living Wage Foundation rate is calculated according to the cost of living.
From April 2023, the Real Living Wage for outside of London is £10.90 per hour. The London Real Living Wage is £11.95 per hour; this figure is set annually by the Greater London Authority and covers all boroughs in Greater London. The National Living Wage for people over 23 is £10.42 per hour. From April 2023 the National Minimum Wage is £10.18 per hour for workers aged 21 to 22.
Leeds hourly wage rates
Table 3.2
| Residents | Job count | Lower 10% Earners | Lower 20% Earners | Lower 25% Earners | Lower 30% Earners | Lower 40% Earners | Median Earners | Top 10% Earners |
| FTE | 323,000 | £9.73 | £10.42 | £10.84 | £11.39 | £12.83 | £14.56 | £28.93 |
| Part-time | 78,000 | £9.46 | £9.52 | £9.65 | £9.80 | £10.17 | £10.65 | x |
| Full Time | 245,000 | £10.30 | £11.26 | £11.97 | £12.69 | £14.05 | £16.04 | £30.51 |
| Workers | Job count | Lower 10% Earners | Lower 20% Earners | Lower 25% Earners | Lower 30% Earners | Lower 40% Earners | Median Earners | Top 10% Earners |
| FTE | 519,000 | £9.71 | £9.96 | £10.27 | £10.65 | £11.46 | £12.78 | £27.04 |
| Part-time | 178,000 | £9.50 | £9.72 | £9.75 | £9.78 | £10.00 | £10.39 | £19.14 |
| Full Time | 341,000 | £9.95 | £10.83 | £11.30 | £11.83 | £13.16 | £14.89 | £29.39 |
| Source: ONS Annual Survey of Hours and Earnings (ASHE), Nov 2022
x = data was not statistically reliable |
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The Annual Survey of Hours and Earnings (ASHE) is based on a 1% sample of employee jobs taken from HM Revenue & Customs PAYE records. ASHE does not cover the self-employed or employees not paid during the reference period. The 2021 ASHE data provides earnings data during April 2021. The data splits the job count sample into percentiles which provides insight into the lowest and top earning residents and workers in Leeds. The ONS state that the job count figures are intended to provide a broad idea of the numbers of employee jobs but they should not be considered accurate estimates and caution should be applied when using these numbers. Job count data is based on survey data within a standard variance level of +/-5%. Therefore the same caution should be applied when referencing the estimates for Leeds.
In addition, over the coronavirus pandemic period, earnings estimates were affected by changes in composition of the workforce and the impact of the Coronavirus Job Retention Scheme (furlough) making interpretation difficult; also data collection disruption and lower response rates mean that, for 2020 and 2021, data were subject to more uncertainty and should be treated with further caution.
For Leeds residents, the median average full-time equivalent (FTE) wage is £14.56, the median full time wage is £16.04 per hour; the median part time wage is £10.65 per hour. With regards people who work in Leeds (not all of which are resident in Leeds); the median average full-time equivalent wage is £12.78, the median full time wage is £14.89 per hour; the median average part time wage is £10.39 per hour.
People in Leeds earning below the Living Wage Foundation’s Real Living Wage
Table 3.3
| 2022 (LW = £9.90) | 2021 (LW = £9.50 ) | Annual Change | |||||||
| Residents | Job count | No | % | Job count | No | % | Job count | No | % |
| FTE | 323,000 | 40,258 | 12.5 | 306,000 | 65,908 | 21.5 | +17,000 | -25,650 | -9.0 |
| Part-time | 78,000 | 25,508 | 32.7 | 74,000 | 32,683 | 44.2 | +4,000 | -7,175 | -11.5 |
| Full Time | 245,000 | 23,549 | 9.6 | 232,000 | 33,853 | 14.6 | +13,000 | -10,304 | -5.0 |
| Workers | Job count | No | % | Job count | No | % | Job count | No | % |
| FTE | 519,000 | 91,344 | 17.6 | 366,000 | 73,663 | 20.1 | +153,000 | +17,681 | -2.5 |
| Part-time | 178,000 | 63,109 | 35.5 | 89,000 | 35,762 | 40.2 | +89,000 | +27,347 | -4.7 |
| Full-time | 341,000 | 33,929 | 9.9 | 277,000 | 36,620 | 13.2 | +64,000 | -2,691 | -3.3 |
| Source: ONS Annual Survey of Hours and Earnings (ASHE), Nov 2022 | |||||||||
Estimates for people earning below the Real Living Wage have been calculated using the 2022 Living Wage figure of £9.90 which was in place during the survey period of the latest ASHE data released in 2022. Similarly, estimates for people earning below the Real Living Wage in 2021 have been calculated using the Real Living Wage figure of £9.50 which was in place during the survey period of the ASHE data released in 2021.
These estimates have been made using the ASHE survey sample of job counts. The ONS state that these are intended to provide a broad idea of the numbers of employee jobs but they should not be considered accurate estimates and caution should be applied when using these numbers. Job count data is based on survey data within a standard variance level of +/-5%. Therefore the same caution should be applied when referencing the estimates for Leeds.
Over the coronavirus pandemic period, earnings estimates were affected by changes in composition of the workforce and the impact of the Coronavirus Job Retention Scheme (furlough) making interpretation difficult; also data collection disruption and lower response rates mean that, for 2020 and 2021, data were subject to more uncertainty and should be treated with further caution.
Growth rates will be particularly affected when comparing 2022 with 2021 estimates because of the quality of the estimates in 2021 and its base effects. For example, for April 2022, average year-on-year pay growth rates are likely to be slightly inflated mainly because in April 2021 some people were furloughed and on reduced pay, so causing a slight base effect.
It is estimated that 12.5% of all Leeds working residents earned less than the Real Living Wage in 2022, affecting 40,258 FTE residents. When this figure is broken down, 9.6% of full time working residents (23,549) and 32.7% of part time working residents (25,508) are earning below the Real Living Wage in Leeds. With regards workers in Leeds, 17.1% earn below the real living wage, impacting 91,344 FTE workers. This affects 9.9% (33,929) full-time workers and 35.5% (63,109) part-time workers.
Hourly Wages; Leeds and UK comparisons
Table 3.4
| Median | Lower 10% | Top 10% | Median Annual Change | ||
| £ | % | ||||
| Leeds Residential | £14.56 | £9.73 | £28.93 | £0.66 | +4.7 |
| Leeds Workplace | £12.78 | £9.71 | £27.04 | (£1.26) | -9.0 |
| UK | £14.77 | £9.80 | £30.22 | £0.67 | +4.8 |
| Source: ONS Annual Survey of Hours and Earnings (ASHE), Nov 2022 | |||||
Please Note: Over the coronavirus pandemic period, earnings estimates were affected by changes in composition of the workforce and the impact of the Coronavirus Job Retention Scheme (furlough) making interpretation difficult; also data collection disruption and lower response rates mean that, for 2020 and 2021, data were subject to more uncertainty and should be treated with caution.
Growth rates will be particularly affected when comparing 2022 with 2021 estimates because of the quality of the estimates in 2021 its base effects. For example, for April 2022, average year-on-year pay growth rates are likely to be slightly inflated mainly because in April 2021 some people were furloughed and on reduced pay, so causing a slight base effect.
Median hourly wages were £14.56/hour for people in work, residing in Leeds compared with £12.78/hour for people working in Leeds (i.e. whether residents or not). Across the UK, the median hourly wage is £14.77/hour. For the lower 10% of earners, residents in Leeds are paid £9.73/hour compared to £9.71/hour for those who work in in Leeds. The top 10% of earners living in Leeds earn over £28.93/hour compared to £27.04/hour for those who work in Leeds.
Median earnings have risen 4.7% on 2021 for resident workers and fallen by 9% for workers in Leeds. Median wages have increased by 4.8% across the UK.
Weekly Wages; Leeds and UK comparisons
Table 3.5
| ASHE | Median | Lower 10% | Top 10% | Median Annual Change | |
| £ | % | ||||
| Leeds Residential | £537 | £189 | £1,061 | +£36.60 | +7.3 |
| Leeds Workplace | £452 | £156 | £996 | -£58.20 | -11.4 |
| UK | £533 | £180 | £1,093 | +£28.50 | +5.7 |
| Source: ONS Annual Survey of Hours and Earnings (ASHE), Nov 2022 | |||||
Please Note: Over the coronavirus pandemic period, earnings estimates were affected by changes in composition of the workforce and the impact of the Coronavirus Job Retention Scheme (furlough) making interpretation difficult; also data collection disruption and lower response rates mean that, for 2020 and 2021, data were subject to more uncertainty and should be treated with caution.
Growth rates will be particularly affected when comparing 2022 with 2021 estimates because of the quality of the estimates in 2021 its base effects. For example, for April 2022, average year-on-year pay growth rates are likely to be slightly inflated mainly because in April 2021 some people were furloughed and on reduced pay, so causing a slight base effect.
Median weekly earnings were £537 for people in work, residing in Leeds compared with £452 for people working in Leeds (i.e. whether residents or not). The median weekly wage in the UK was £533. For the lower 10% of earners, residents in Leeds are paid £189/week while workers in Leeds are paid £156/week. The top 10% of earners living in Leeds earn over £1,061/week compared to £996/week for those who work in Leeds.
Median earnings have risen 7.3% on 2021 for residents and fallen by 11.4% for workers in Leeds. Median wages have increased by 5.7% across the UK.
Annual Salaries; Leeds and UK comparisons
Table 3.6
| ASHE | Median | Lower | Top | Median Annual Change | |
| 10% | 10% | £ | % | ||
| Leeds Residential | £28,639 | £10,933 | £55,670 | +£2,341.00 | +8.9 |
| Leeds Workplace | £23,935 | £9,258 | £52,427 | -£2,744.00 | -10.3 |
| UK | £33,000 | £19,403 | £62,583 | +£7,029.00 | +27.1 |
| Source: ONS Annual Survey of Hours and Earnings (ASHE), Nov 2022 | |||||
Please Note: Over the coronavirus pandemic period, earnings estimates were affected by changes in composition of the workforce and the impact of the Coronavirus Job Retention Scheme (furlough) making interpretation difficult; also data collection disruption and lower response rates mean that, for 2020 and 2021, data were subject to more uncertainty and should be treated with caution.
Growth rates will be particularly affected when comparing 2022 with 2021 estimates because of the quality of the estimates in 2021 its base effects. For example, for April 2022, average year-on-year pay growth rates are likely to be slightly inflated mainly because in April 2021 some people were furloughed and on reduced pay, so causing a slight base effect.
Median annual earnings were £28,639 for people in work, residing in Leeds compared with £23,935 for people working in Leeds (i.e. whether residents or not). The median annual salary in the UK was £33,000. Median earnings have risen by 8.9% on 2021 for residents and fallen by 10.3% for workers in Leeds. Median wages have risen by 27.1% across the UK.
For the lower 10% of earners, residents in Leeds are paid £10,933/year compared to £9,258/year for those who work in in Leeds. For the 10% top earners, residents in Leeds were paid £55,670/year compared to £52,427 for those working in Leeds.
Impact of Inflation on Weekly Wages
Table 3.7
| ASHE | UK | Leeds | ||
| FTE | Median | Median | Lower 10% | Top 10% |
| 2021 Weekly Earnings | £504.40 | £500.40 | £184.00 | £984.80 |
| 2022 Weekly Earnings | £532.50 | £536.60 | £189.00 | £1,060.90 |
| Nominal Change | +£28.10 | +£36.20 | +£5.00 | +£76.10 |
| Nominal % Change | +5.6% | +7.2% | +2.7% | +7.7% |
| Real Change | -£11.24 | -£9.84 | -£11.93 | -£14.50 |
| Real % Change | -2.1% | -1.8% | -5.9% | -1.3% |
| Source:
ONS Annual Survey of Hours and Earnings (ASHE), Nov 2022 Centre for Cities Inflation Rate for Local Areas, for April 2022 Please note Centre for Cities estimate that inflation for Leeds was 9.2% in April 2022. This has been applied to the ONS Annual Survey of Hours and Earnings which is carried out in April every year. At the same time nationally, inflation was at 7.8% in April 2022, and this was applied to the national earning figures. |
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Table 3.7 provides the inflationary impact on median weekly earnings for Leeds residents and the UK. Real term estimates have also been provided for Leeds’ lowest 10% earners and top 10% earners.
Annual Survey of Hours and Earnings (ASHE) report that for full-time equivalent employees in the UK, median weekly earnings in April 2022 increased to £532.50 by 5.6% (£28.10) from a year earlier on a nominal basis, and when adjusted for inflation (7.8%), it fell by 2.1% (down £11.24 per week).
In Leeds; full-time equivalent resident employees, median weekly earnings increased to £536.60 up by 7.2% (up £36.20) from a year earlier on a nominal basis, and when adjusted for inflation at 9.2%, it fell by 1.8% (down £9.84 per week). Looking at the real term impact on the lower 10% of earners, it is estimated that Leeds residents saw a weekly loss of 5.9% (£11.93) and the top 10% of earners are losing 1.3% of their income in real terms, (down £14.50 a week). This analysis highlights how it is those on lowest income being hit the hardest by the inflationary impacts and the cost of living.
Employment Trends
Table 3.8
| Year | Leeds | UK | ||
| No | % | No | % | |
| 2008 | 355,800 | 71.5 | 28,735,700 | 72.1 |
| 2012 | 344,000 | 68.6 | 28,535,500 | 70.5 |
| 2013 | 342,700 | 68.2 | 28,846,600 | 71.2 |
| 2014 | 347,400 | 68.9 | 29,369,200 | 72.2 |
| 2015 | 378,500 | 74.9 | 30,018,200 | 73.5 |
| 2016 | 374,200 | 74.1 | 30,299,400 | 73.9 |
| 2017 | 390,800 | 76.6 | 30,750,500 | 74.7 |
| 2018 | 388,900 | 75.0 | 30,933,500 | 75.0 |
| 2019 | 384,800 | 74.6 | 31,266,400 | 75.6 |
| 2020 | 413,900 | 80.6 | 31,177,800 | 75.3 |
| 2021 | 374,400 | 72.7 | 30,839,900 | 74.7 |
| Source: ONS Annual Population Survey, (Jan-Dec 2021),quarterly release, April 2022
Care should be used in interpreting the Leeds data year on year because it is sample based and with at least a 2% confidence interval in each year. |
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In the year to December 2021, employment in Leeds was estimated at 374,400. This is a rate of 72.7%, and is 2 percentage points below than the national level.
Estimates of people on Zero Hour Contracts
Table 3.9
| % on zero hour | UK employees on zero hour | Leeds employees on zero hour* | |
| 2008 | 0.5% | 143,000 | 1,779 |
| 2009 | 0.6% | 189,000 | 2,072 |
| 2010 | 0.6% | 168,000 | 2,062 |
| 2011 | 0.6% | 190,000 | 2,030 |
| 2012 | 0.8% | 252,000 | 2,752 |
| 2013 | 1.9% | 586,000 | 6,513 |
| 2014 | 2.3% | 699,000 | 7,986 |
| 2015 | 2.5% | 804,000 | 9,468 |
| 2016 | 2.8% | 907,000 | 10,478 |
| 2017 | 2.8% | 902,000 | 10,942 |
| 2018 | 2.6% | 844,000 | 10,111 |
| 2019 | 3.0% | 974,000 | 11,544 |
| 2020 | 3.1% | 995,000 | 12,831 |
| 2021 | 3.2% | 1,034,000 | 11,981 |
| Source: ONS Labour Force Survey, Oct-Dec 2021, Zero Hours Analysis, released February 2022
*Leeds figures are estimated using the national percentage rates on Employment figures from the APS, April 2021 |
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National figures from the Labour Force Survey (LFS) show the number of people who report that they are on a zero-hours contract in their main employment. In Dec 2021, 3.2% of those surveyed reported being on a zero hour contract. This equates to 1.03m people in the UK. On the assumption 3.2% of people in employment are on zero contracts in Leeds, using Employment figures for Leeds of 374,400 (Jan-Dec 2021), it is estimated that 11,981 workers are on zero hour contracts.
Unemployment Trends
Table 3.10
| Year | Leeds | UK | ||
| No | % | No | % | |
| 2008 | 24,100 | 6.3 | 1,633,300 | 5.8 |
| 2012 | 37,300 | 9.8 | 2,510,700 | 8.0 |
| 2013 | 35,900 | 9.5 | 2,486,200 | 7.7 |
| 2014 | 33,100 | 8.7 | 2,088,100 | 6.4 |
| 2015 | 23,500 | 5.8 | 1,704,700 | 5.4 |
| 2016 | 16,700 | 4.3 | 1,588,200 | 5.0 |
| 2017 | 18,100 | 4.4 | 1,441,100 | 4.5 |
| 2018 | 13,400 | 3.3 | 1,374,600 | 4.3 |
| 2019 | 16,700 | 4.2 | 1,290,300 | 4.0 |
| 2020 | 17,800 | 4.1 | 1,515,400 | 4.6 |
| 2021 | 22,000 | 5.5 | 1,457,800 | 4.5 |
| Source: ONS Annual Population Survey, (Jan-Dec 2020),quarterly release, April 2021 | ||||
In Leeds 22,000 people were unemployed in 2021, (a rate of 5.5%) an increase from 17,800 in 2020 (4.1%). In the same period nationally, 4.5% of the UK were unemployed and had decreased from 4.6% on 2020.
Further Information: Living Wage and Minimum Wage Definitions
In April 2016 the government introduced a higher minimum wage rate for all staff over 25 years of age (reduced in April 2021 to staff over 23 years of age) and call this the ‘National Living Wage’. However, the government’s ‘National Living Wage’ is different to the ‘Real Living Wage’ set by the Living Wage Foundation.
The government’s National Minimum Wage rates change every October and is set by the Low Pay Commission. The National Living Wage rates for those over the age of 23 change every April. The UK’s Real Living Wage rate is set annually by the Living Wage Foundation and calculated by the Centre for Research in Social Policy at Loughborough University (and is informed by the Minimum Income Standard). The figure is announced every November and employers are advised to implement the new rates within 6 months of the announcement.
The National Living Wage and National Minimum Wage set by government are compulsory for employers while the Real Living Wage is voluntary. The government rate is based on median earnings while the Living Wage Foundation rate is calculated according to the cost of living.