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					 The Minimum Wage
 and Gender Equality
          ESRC GeNet Conference on
The Credit Crunch: Gender Equality in
             Hard Times
                  6th March 2009



                 William Brown
     with warm thanks to Low Pay Commission staff

                                                    1
          Women in the labour market

• Rising proportion in employment: - women in workplaces of 25 or
  more rose 38% to 48% between 1980 and 2004
• 40% of women work part-time
• Three-quarters of part-time workers are female
• Women’s membership of trade unions is now same as for men
• Activity rates (16-59/64, 2008iv): women     men
   – Employment rate                 70%       78%
   – Unemployment rate               5.7%      6.9%
   – Economic inactivity rate 26%              16%
• 29% of women compared to 13% of men are employed in the public
  sector (2006)
• Two-thirds of employees in low-paying occupations are women

                                                                2
                                                                                                                                                  Proportion of male and female employees (per cent)




                                                                                                                                                      0
                                                                                                                                                          10
                                                                                                                                                               20
                                                                                                                                                                    30
                                                                                                                                                                         40
                                                                                                                                                                              50
                                                                                                                                                                                   60
                                                                                                                                                                                        70
                                                                                                                                                                                             80
                                                                                                                                                                                                  90
                                                                                                                                                                                                       100
                                                                                                                                          Security


                                                                                                                                        Agriculture


                                                                                                                                   Food processing


                                                                                                                                           Leisure


                                                                                                                                        Hospitality


                                                                                                                                          Cleaning


                                                                                                                                             Retail




                                                                                                  Men
                                                                                                                                           Textiles




                                                                                                  Women
                                                                                                                                       Social Care




Source: LPC estimates of LFS Microdata, data not seasonally adjusted, calendar quarter, Q2 2008
                                                                                                          Low-paying occupations
                                                                                                                                       Office work
                                                                                                                                                                                                                         paying occupations




                                                                                                                                      Hairdressing


                                                                                                                                         Childcare


                                                                                                                                       Low-paying
                                                                                                                                       occupations

                                                                                                                                         Other
                                                                                                                                      Occupations
                                                                                                                                                                                                             Gender segregation tends to be higher in low-




                                                                                                    3




                                                                                                                                    All occupations
  What has happened to the gender pay gap?

• Gender pay ratio = women’s earnings as a percentage of
  men’s (e.g. 85%)
• Gender pay gap = percentage difference between
  women’s and men’s earnings i.e. 100% minus gender
  pay ratio (e.g. 15%)

• Annual gender pay gap > weekly > hourly
   – Difference in working hours and additional payments
• Mean pay gap
   – Used for international comparisons
   – But includes extreme earnings
   – Less stable

Used here: median gross hourly pay excluding
  overtime for full-timers, aged 18 and above
                                                           4
                                     The gender pay gap 1997-2008
                              lowest decile and median declining; upper static


   Year                                             £ per hour                                                        Per cent
                                   Men                                     Women                                      Pay gap
                     Lowest                        Upper       Lowest                        Upper        Lowest                   Upper
                                   Median                                    Median                                     Median
                      decile                       decile       decile                       decile        decile                  decile
   1997                4.44           8.19         17.24         3.87            6.87        13.83          12.9            16.1    19.7
   1998                4.62           8.54         18.10         4.08            7.14        14.44          11.6            16.4    20.2
   1999                4.85           8.85         18.89         4.29            7.46        15.22          11.5            15.7    19.4
   2000                4.94           8.87         19.45         4.41            7.65        15.67          10.8            13.8    19.4
   2001                5.15           9.32         20.84         4.65            8.02        16.54           9.7            14.0    20.6
   2002                5.40           9.72         21.94         4.88            8.41        17.43           9.6            13.5    20.6
   2003                5.63          10.03         22.53         5.11            8.75        18.00           9.1            12.7    20.1
   2004                5.81          10.48         23.44         5.36            9.21        18.94           7.6            12.1    19.2
   2004                5.76          10.36         23.02         5.33            9.10        18.75           7.5            12.2    18.6
   2005                6.00          10.80         24.24         5.60            9.60        19.76           6.7            11.1    18.5
   2006                6.24          11.22         25.38         5.84           10.00        20.28           6.4            10.9    20.1
   2006                6.20          11.14         25.25         5.75            9.86        20.12           7.3            11.5    20.3
   2007                6.50          11.61         26.25         6.08           10.34        20.87           6.5            11.0    20.5
   2008                6.73          12.16         27.27         6.25           10.74        22.16           7.1            11.6    18.7

    NB: ONS figures are higher than ASHE figures as they only included workers on adult rates




Source: LPC estimates based on ASHE without supplementary information, 1997-2004, ASHE with supplementary information, 2004-2006     5
and ASHE with supplementary information new methodology, 2006–2008, normal weights, UK.
Note: Care should be taken when comparing ASHE series. 18+, full time workers.
                                                                   The gender pay gap by percentiles: 1998 - 2008
                   gap increases with the earnings distribution - but has narrowed at lower levels
                                                              40                                                                                                         40
  Gender pay gap (per cent) for full-time employees aged 18




                                                              35                                                                                                         35


                                                              30                                                                                                         30
                    and over (per cent)




                                                              25                                                                                                         25


                                                              20                                                                                                         20


                                                              15                                                                                                         15


                                                              10                                                                                                         10


                                                               5                                                                                                         5


                                                               0                                                                                                         0
                                                                   5   10   15   20   25   30   35    40    45    50    55    60    65     70   75   80   85   90   95
                                                                                           Percentile point of hourly earnings distribution

                                                                                                  1998        2006       2007       2008
Source: LPC estimates based on ASHE without supplementary information, 1998, ASHE with supplementary information, 2004 and ASHE                                              6
with supplementary information new methodology, 2006–2007, low-pay weights, UK.
Note: Care should be taken when comparing ASHE series.
                                                                            The gender pay gap varies by age…
                                                                      25
       Median gender pay gap by age group, full-time employees (per




                                                                      20


                                                                      15


                                                                      10
                                 cent)




                                                                       5


                                                                       0


                                                                       -5


                                                                      -10


                                                                      -15
                                                                             16-17   18-21      22-29              30-39         40-49          50-59   60+
                                                                                                                   Age

                                                                                             1998 (*)   2002 (*)    2006(new)   2007     2008


Source: LPC estimates based on ASHE without supplementary information, 1998-2002 and ASHE with supplementary information new                                  7
methodology, 2006–2007, low-pay weights, UK.
Note: Care should be taken when comparing ASHE series.
                                                                                                                …and by UK country
                                                                                                 14
         Gender pay gap of median gross hourly earnings excl. overtime for full-time employees




                                                                                                 12



                                                                                                 10



                                                                                                  8
                                        aged 18+ (per cent)




                                                                                                  6



                                                                                                  4



                                                                                                  2



                                                                                                  0



                                                                                                 -2
                                                                                                      England     Wales             Scotland          Northern Ireland   UK

                                                                                                                          2004   2005   2006   2007   2008


Source: ASHE with supplementary information, 2004-2005 and ASHE with supplementary information new methodology, 2006–2007, low-                                               8
pay weights, UK.
Note: Care should be taken when comparing ASHE series.
                     From the 30th percentile the gap is larger
                            for low-paying sectors…
                                                                  25
        Gender pay gap for full-time employees aged 18 and over




                                                                  20




                                                                  15
                                (per cent)




                                                                  10




                                                                   5




                                                                   0
                                                                       10   20   30          40            50           60           70   80   90
                                                                                  Percentile point of the hourly earnings distribution
                                                                                      Low-paying sectors   Non Low-paying sectors
                                                                                                                                                    9
Source: LPC estimates, ASHE new methodology, normal weights, UK, April 2008.
    …but is smaller for low-paying occupations.
                                                                          20
          Gender pay gap for full-time employees aged 18+ and over (per




                                                                          18


                                                                          16


                                                                          14


                                                                          12
                                        cent)




                                                                          10


                                                                          8


                                                                          6


                                                                          4


                                                                          2


                                                                          0
                                                                               10   20   30            40         50            60           70     80   90
                                                                                          Percentile point of the hourly earnings distribution

                                                                                              Low-paying occupations   Non Low-paying occupations

                                                                                                                                                              10
Source: LPC estimates, ASHE new methodology, low-pay weights, UK, April 2006.
   …for part-time work, women earn more than
                      men
                                                 £ per hour                                                 Per cent
                                                                                           Pay ratio Pay ratio              Pay ratio
                                                                                             female    female                 female
                                     Men                           Women
                                                                                           part-time part-time              part-time
                                                                                            to male   to male               to female
                                                                                           full-time part-time               full-time
                          Full-time Part-time Full-time Part-time
        1997                   8.19      4.81      6.87      4.73                                  57.7            98.3            68.8
        1998                   8.54      4.75      7.14      4.87                                  57.0           102.5            68.2
        1999                   8.85      5.00      7.46      5.07                                  57.2           101.4            67.9
        2000                   8.87      5.00      7.65      5.12                                  57.7           102.4            67.0
        2001                   9.32      5.19      8.02      5.36                                  57.5           103.2            66.8
        2002                   9.72      5.50      8.41      5.53                                  56.9           100.5            65.7
        2003                  10.03      5.84      8.75      5.93                                  59.2           101.6            67.8
        2004                  10.48      6.00      9.21      6.18                                  58.9           103.0            67.0
        2004                  10.36      6.00      9.10      6.16                                  59.4           102.6            67.7
        2005                  10.80      6.50      9.60      6.63                                  61.4           101.9            69.0
        2006                  11.22      6.78     10.00      6.90                                  61.5           101.8            69.0
        2006                  11.14      6.84      9.86      6.88                                  61.7           100.6            69.7
        2007                  11.61      7.16     10.34      7.21                                  62.1           100.7            69.8
        2008                  12.16      7.30     10.74      7.48                                  61.5           102.5            69.6
Source: LPC estimates based on ASHE without supplementary information, 1997-2004, ASHE with supplementary information, 2004-2006      11
and ASHE with supplementary information new methodology, 2006–2008, low-pay weights, UK.
Note: Care should be taken when comparing ASHE series.
What has been the impact of
   the minimum wage?




                              12
                                                                          Percentage of employee jobs held by those aged 22 and over
                                                                                                                                                                                                                                                             Percentage of employee jobs held by those aged 22 and over




                                                                        0.0
                                                                                  1.0
                                                                                            2.0
                                                                                                     3.0
                                                                                                               4.0
                                                                                                                         5.0
                                                                                                                                   6.0
                                                                                                                                                                                                                                                       0.0
                                                                                                                                                                                                                                                                    1.0
                                                                                                                                                                                                                                                                              2.0
                                                                                                                                                                                                                                                                                        3.0
                                                                                                                                                                                                                                                                                                   4.0
                                                                                                                                                                                                                                                                                                             5.0
                                                                                                                                                                                                                                                                                                                          6.0




                                                                 0.00
                                                                                                                                                                                                                                                0.00
                                                                 1.00
                                                                                                                                                                                                                                                1.00
                                                                 2.00
                                                                                                                                                                                                                                                2.00
                                                                 3.00
                                                                                                                                                                                                                                                3.00
                                                                 4.00
                                                                                                                                                                                                                                                4.00
                                                                 5.00
                                                                                                                                                                                                                                                5.00
                                                                 6.00
                                                                                                                                                                                                                                                6.00
                                                                 7.00
                                                                                                                                                                                                                                                7.00
                                                                 8.00
                                                                                                                                                                                                                                                8.00
                                                                 9.00
                                                                                                                                                                                                                                                9.00
                                                                10.00
                                                                                                                                                                                                                                               10.00
                                                                11.00
                                                                                                                                                                                                                                               11.00
                                                                12.00
                                                                                                                                                                                                                                               12.00
                                                                13.00
                                                                                                                                                                                                                                               13.00
                                                                14.00
                                                                                                                                                                                                                                               14.00
                                                                15.00
                                                                                                                                                                                                                                               15.00
                                                                16.00
                                                                                                                                                                                                                                               16.00
                                                                17.00
                                                                                                                                                                                                                                               17.00
                                                                18.00
                                                                                                                                                                                                                                               18.00
                                                                19.00
                                                                                                                                                                                                                                               19.00
                                                                                                                                                                                                     Gross hourly pay excluding overtime (£)




                                                                20.00
                                                                                                                                                                                                                                               20.00
                                                                                                                                                                                                                                                                                                                                Hourly Earnings Distribution, Adults, 1997




                                                                21.00
                                                                                                                                                                                                                                               21.00




 Gross hourly pay excluding overtime - 25 pence pay bands (£)
                                                                22.00
                                                                                                                                         Hourly Earnings Distribution, Adults (22 and over), 2007




                                                                                                                                                                                                                                               22.00
                                                                23.00
                                                                                                                                                                                                                                               23.00
                                                                24.00
                                                                                                                                                                                                                                               24.00
                                                                25.00
                                                                                                                                                                                                                                               25.00
                                                                26.00
                                                                                                                                                                                                                                               26.00
                                                                27.00
                                                                                                                                                                                                                                               27.00
                                                                                                                                                                                                                                                                                                                                                                                          1997 and 2007




                                                                28.00
                                                                                                                                                                                                                                               28.00
                                                                29.00
                                                                                                                                                                                                                                               29.00
 £30 and over
                                                                                                                                                                                                    £30 and over
                                                                        0.0
                                                                                  1.0
                                                                                            2.0
                                                                                                     3.0
                                                                                                               4.0
                                                                                                                         5.0
                                                                                                                                   6.0
                                                                                                                                                                                                                                                       0.0
                                                                                                                                                                                                                                                                    1.0
                                                                                                                                                                                                                                                                              2.0
                                                                                                                                                                                                                                                                                        3.0
                                                                                                                                                                                                                                                                                                   4.0
                                                                                                                                                                                                                                                                                                             5.0
                                                                                                                                                                                                                                                                                                                          6.0
                                                                                                                                                                                                                                                                                                                                                                             The national income distribution had its
                                                                                                                                                                                                                                                                                                                                                                             lower end sharply compressed between




13
The previous collapse of low pay was reversed ….
 earnings growth by percentile 1992-97 compared to 1998-2007



                                                                60                                                                                                                     60
  Percentage increase in percentile earnings minus percentage




                                                                50                                                                                                                     50


                                                                40                                                                                                                     40
                  increase in median earnings




                                                                30                                                                                                                     30


                                                                20                                                                                                                     20


                                                                10                                                                                                                     10


                                                                 0                                                                                                                     0
                                                                      1   6   11    16    21    26    31    36    41    46    51    56    61    66   71    76    81    86    91   96

                                                                -10                                                                                                                    -10


                                                                -20                                                                                                                    -20
                                                                              Percentile of the gross hourly earnings excluding overtime distribution (adults aged 22 and over)

                                                                                                                  1998–2007         1992–1997



                                                                                                                                                                                             14
        Of those affected by the NMW in 2008 – two-
                     thirds are women
                                                                                   Full-time Male
                                                                                         21%




            Part-time Female
                   45%




                                                                                            Full-time Female
                                                                                                   20%




                                                             Part-time Male
                                                                  14%



Source: Annual Survey of Hours and Earnings (ASHE) including supplementary information new methodology, low pay
weights, 2008.                                                                                                         15
Note: Low-paid defined as adults (aged 22 and over) earning £5.64 or less, youths (aged 18-21) earning £4.70 or less and
16-17 year olds earning £3.48 or less in April 2008.
                                                                                                                                                      Percentage of female employee jobs held by those aged 22 year
                                                                                                                                                                             olds and older




                                                                                                                                                       0.0
                                                                                                                                                               0.5
                                                                                                                                                                      1.0
                                                                                                                                                                             1.5
                                                                                                                                                                                     2.0
                                                                                                                                                                                            2.5
                                                                                                                                                                                                    3.0
                                                                                                                                                                                                           3.5
                                                                                                                                                                                                                      4.0
                                                                                                     Under £4.50
                                                                                                            4.50
                                                                                                            4.55
                                                                                                            4.60
                                                                                                            4.65
                                                                                                            4.70
                                                                                                            4.75
                                                                                                            4.80
                                                                                                            4.85
                                                                                                            4.90
                                                                                                            4.95
                                                                                                            5.00
                                                                                                                                                                                                   Adult NMW 2006
                                                                                                            5.05                                                                                            (£5.05)
                                                                                                            5.10
                                                                                                            5.15
                                                                                                            5.20




                                                                                              2006
                                                                                                            5.25
                                                                                                            5.30
                                                                                                            5.35
                                                                                                            5.40
                                                                                                            5.45                                                                                   Adult NMW 2008




                                                                                              2008
                                                                                                            5.50                                                                                            (£5.52)




Source: LPC estimates, ASHE new methodology, low-pay weights, UK, April 2006 and 2008.
                                                                                                            5.55
                                                                                                            5.60
                                                                                                            5.65
                                                                                                            5.70
                                                                                                            5.75
                                                                                                            5.80
                                                                                                            5.85
                                                                                                            5.90
                                                                                                       Gross hourly earnings excluding overtime (£)

                                                                                                            5.95
                                                                                                            6.00
                                                                                                                                                                                                                                     women’s earnings…




                                                                                                            6.05
                                                                                                            6.10
                                                                                                            6.15
                                                                                                            6.20
                                                                                                            6.25
                                                                                                            6.30
                                                                                                            6.35
                                                                                                            6.40
                                                                                                            6.45
                                                                                                            6.50
                                                                                                            6.55
                                                                                                                                                                                                                            There has been a substantial impact on




                                                                                                            6.60
                                                                                         16
                                                                                                                                                       0.0
                                                                                                                                                               0.5
                                                                                                                                                                      1.0
                                                                                                                                                                             1.5
                                                                                                                                                                                     2.0
                                                                                                                                                                                            2.5
                                                                                                                                                                                                    3.0
                                                                                                                                                                                                           3.5
                                                                                                                                                                                                                      4.0
                                      …but no evidence of an impact on
                                       employment or unemployment.
                                100                                                                                             20

                                90                                                                                              18

                                80                                                                                              16




                                                                                                                                     Working age unemployment rate
  Working age employment rate




                                70                                                                                              14

                                60                                                                                              12

                                50                                                                                              10

                                40                                                                                              8

                                30                                                                                              6

                                20                                                                                              4

                                10                                                                                              2

                                 0                                                                                              0
                                         1971
                                         1973
                                         1975
                                         1977
                                         1979
                                         1981
                                         1983
                                         1985
                                         1987
                                         1989
                                         1991
                                         1993
                                         1995
                                         1997
                                      1998 Q1
                                      1998 Q3
                                      1999 Q1
                                      1999 Q3
                                      2000 Q1
                                      2000 Q3
                                      2001 Q1
                                      2001 Q3
                                      2002 Q1
                                      2002 Q3
                                      2003 Q1
                                      2003 Q3
                                      2004 Q1
                                      2004 Q3
                                      2005 Q1
                                      2005 Q3
                                      2006 Q1
                                      2006 Q3
                                      2007 Q1
                                      2007 Q3
                                      2008 Q1
                                      2008 Q3
                                                                 Year/Quarter
                                        Employment Men (LHS)                        Employment Women (LHS)
                                        Unemployment Men (RHS)                      Unemployment Women (RHS)
                                                                                                                                     17
Source: ONS Working age employment rate (MGSV, MGSW) and Working age unemployment rate (YBTJ, YBTK), seasonally adjusted, UK,
     1971–1997 and 1998Q1–2008Q3.
   Why have there been no apparent adverse
      employment effects of the NMW?

• 90% of NMW jobs are in service sectors: few face
  international competition; many with low price elasticity
• Prices in some of these sectors rose as a result of NMW
• Major low paying service sectors (retail, hospitality,
  cleaning, care etc) saw growing demand
• Evidence of improved productivity arising from improved
  management in response to more expensive labour
• …and of shift of employment to better managed firms
• …and increased concentration of ownership
• The NMW has been raised very gradually relative to
  average earnings

                                                          18
   Three phases of NMW growth: very cautious to 2001, faster
     than average earnings to 2007, cautious subsequently
                                                       70                                                                                                                                                                                                                                                                                                                                                                                                                                    60



                                                       60
     Cumulative percentage increase since April 1999




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             50


                                                       50
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             40

                                                       40

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             30

                                                       30

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             20
                                                       20


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             10
                                                       10



                                                       0                                                                                                                                                                                                                                                                                                                                                                                                                                     0
                                                            1999 April




                                                                                                       2000 April




                                                                                                                                                  2001 April




                                                                                                                                                                                             2002 April




                                                                                                                                                                                                                                         2003 April




                                                                                                                                                                                                                                                                                      2004 April




                                                                                                                                                                                                                                                                                                                                 2005 April




                                                                                                                                                                                                                                                                                                                                                                            2006 April




                                                                                                                                                                                                                                                                                                                                                                                                                       2007 April




                                                                                                                                                                                                                                                                                                                                                                                                                                                                  2008 April
                                                                         1999 August




                                                                                                                    2000 August




                                                                                                                                                               2001 August




                                                                                                                                                                                                          2002 August




                                                                                                                                                                                                                                                      2003 August




                                                                                                                                                                                                                                                                                                   2004 August




                                                                                                                                                                                                                                                                                                                                              2005 August




                                                                                                                                                                                                                                                                                                                                                                                         2006 August




                                                                                                                                                                                                                                                                                                                                                                                                                                    2007 August




                                                                                                                                                                                                                                                                                                                                                                                                                                                                               2008 August
                                                                                       1999 December




                                                                                                                                  2000 December




                                                                                                                                                                             2001 December




                                                                                                                                                                                                                        2002 December




                                                                                                                                                                                                                                                                      2003 December




                                                                                                                                                                                                                                                                                                                 2004 December




                                                                                                                                                                                                                                                                                                                                                            2005 December




                                                                                                                                                                                                                                                                                                                                                                                                       2006 December




                                                                                                                                                                                                                                                                                                                                                                                                                                                  2007 December
                                                                                                                                                                                                                                                                    Month

                                                                                                                                                                                  Adult NMW                                             AEI including bonuses                                                              CPI                        RPI                          RPIX


Source: LPC estimates based on ONS data, AEI including bonuses (ONS code LNMQ), RPIX (ONS code CHMK), RPI (ONS code CHAW) and                                                                                                                                                                                                                                                                                                                                                                19
CPI (ONS code D7BT), monthly, seasonally adjusted (not seasonally adjusted for RPIX, RPI and CPI), GB (UK for RPIX, RPI AND CPI), 1999-
2008
 The NMW has had a substantial effect on the
gender pay gap, without evident adverse effects


    What might be the consequences of a
             major recession?



                                                  20
                                                                                                                                                                                Change in employment on a year earlier (thousands)




                                                                                                                                                                         -150
                                                                                                                                                                                 -100
                                                                                                                                                                                        -50
                                                                                                                                                                                              0
                                                                                                                                                                                                    50
                                                                                                                                                                                                          100
                                                                                                                                                                                                                  150
                                                                                                                                                                                                                          200
                                                                                                                                                                                                                                  250
                                                                                                                                                                                                                                          300
                                                                                                                                                                                                                                                  350
                                                                                                                                                                                                                                                          400
                                                                                                                                                         1998 January
                                                                                                                                                            1998 April
                                                                                                                                                            1998 July
                                                                                                                                                         1998 October
                                                                                                                                                         1999 January
                                                                                                                                                            1999 April
                                                                                                                                                            1999 July
                                                                                                                                                         1999 October
                                                                                                                                                         2000 January
                                                                                                                                                            2000 April
                                                                                                                                                            2000 July
                                                                                                                                                         2000 October
                                                                                                                                                         2001 January
                                                                                                                                                            2001 April




monthly, seasonally adjusted, UK, 1998–2008
                                                                                                                                                            2001 July
                                                                                                                                                         2001 October
                                                                                                                                                         2002 January
                                                                                                                                                            2002 April
                                                                                                                                                            2002 July
                                                                                                                                                         2002 October
                                                                                                                                                         2003 January




                                                                                                                            Change in employment (LHS)
                                                                                                                                                            2003 April
                                                                                                                                                            2003 July
                                                                                                                                                         2003 October
                                                                                                                                                         2004 January
                                                                                                                                                            2004 April
                                                                                                                                                            2004 July
                                                                                                                                                         2004 October
                                                                                                                                                         2005 January
                                                                                                                                                            2005 April
                                                                                                                                                            2005 July
                                                                                                                                                         2005 October
                                                                                                                                                         2006 January
                                                                                                                                                            2006 April
                                                                                                                                                            2006 July
                                                                                                                            Claimant count level (RHS)


                                                                                                                                                         2006 October
                                                                                                                                                         2007 January
                                                                                                                                                            2007 April
                                                                                                                                                            2007 July
                                                                                                                                                         2007 October
                                                                                                                                                                                                                                                                        unemployment increased sharply




                                                                                                                                                         2008 January
                                                                                                                                                            2008 April
                                                                                                                                                            2008 July
                                                                                                                                                         2008 October
                                                                                                                                                         2009 January
                                                                                                                                                                         500
                                                                                                                                                                                 600
                                                                                                                                                                                        700
                                                                                                                                                                                              800
                                                                                                                                                                                                    900




                                                                                                                 21
                                                                                                                                                                                                          1,000
                                                                                                                                                                                                                  1,100
                                                                                                                                                                                                                          1,200
                                                                                                                                                                                                                                  1,300
                                                                                                                                                                                                                                          1,400
                                                                                                                                                                                                                                                  1,500
                                                                                                                                                                                                                                                          1,600
                                                                                                                                                                                                                                                                  Employment growth has slowed since 2008, while




                                                                                                                                                                                         Claimant Count level (thousands)
Source: LPC estimates based on LFS working age employment levels (ONS code YBSE) and total claimant count (ONS code BCJD)
                                                                                                                                                  Redundancies (thousands)




                                                                                                                          100
                                                                                                                                120
                                                                                                                                      140
                                                                                                                                            160
                                                                                                                                                  180
                                                                                                                                                        200
                                                                                                                                                              220
                                                                                                                                                                    240
                                                                                                                                                                          260
                                                                                                                                                                                280
                                                                                                                                                                                      300
                                                                                                                                                                                            320
                                                                                                                                                                                                  340
                                                                                                                                                                                                        360
                                                                                                                                                                                                              380
                                                                                                                                                                                                                    400
                                                                                                             2001 June
                                                                                                           2001 August
                                                                                                          2001 October
                                                                                                       2001 December
                                                                                                         2002 February
                                                                                                             2002 April
                                                                                                             2002 June
                                                                                                           2002 August
                                                                                                          2002 October
                                                                                                       2002 December
                                                                                                         2003 February
                                                                                                             2003 April
                                                                                                             2003 June
                                                                                                           2003 August
                                                                                                          2003 October
                                                                                                       2003 December
                                                                                                         2004 February
                                                                                                             2004 April
                                                                                                             2004 June
                                                                                                           2004 August
                                                                                                          2004 October
                                                                                                       2004 December




                                                                                  Redundancies (LHS)
                                                                                                         2005 February
                                                                                                             2005 April
                                                                                                             2005 June
                                                                                                           2005 August
                                                                                                          2005 October
                                                                                                       2005 December
                                                                                                         2006 February
                                                                                                             2006 April




Source: ONS data (codes BEAO and AP2Y), seasonally adjusted, UK, 2001–2008
                                                                                                             2006 June
                                                                                                           2006 August
                                                                                                          2006 October
                                                                                  Vacancies (RHS)      2006 December
                                                                                                        2007 February
                                                                                                             2007 April
                                                                                                             2007 June
                                                                                                           2007 August
                                                                                                          2007 October
                                                                                                       2007 December
                                                                                                        2008 February
                                                                                                             2008 April
                                                                                                             2008 June
                                                                                                                                                                                                                             2008 as redundancies have risen




                                                                                                           2008 August
                                                                                                          2008 October
                                                                                                       2008 December
                                                                                                                          400
                                                                                                                                420
                                                                                                                                      440
                                                                                                                                            460
                                                                                                                                                  480
                                                                                                                                                        500
                                                                                                                                                              520
                                                                                                                                                                    540
                                                                                                                                                                          560
                                                                                                                                                                                580
                                                                                                                                                                                      600
                                                                                                                                                                                            620
                                                                                                                                                                                                  640
                                                                                                                                                                                                        660
                                                                                                                                                                                                              680
                                                                                                                                                                                                                    700
                                                                                                                                                                                                                          Vacancies have fallen sharply since April




                                                                             22




                                                                                                                                                   Job vacancies (thousands)
                                                                                               Change on a year earlier (per cent)




                                                                                        -0.5
                                                                                                0.0
                                                                                                       0.5
                                                                                                               1.0
                                                                                                                      1.5
                                                                                                                              2.0
                                                                                                                                     2.5
                                                                          1999 March
                                                                            1999 June
                                                                      1999 September
                                                                       1999 December
                                                                          2000 March
                                                                            2000 June
                                                                      2000 September
                                                                       2000 December
                                                                          2001 March
                                                                            2001 June
                                                                      2001 September
                                                                       2001 December
                                                                          2002 March




Source: ONS, Employee Jobs, GB, 1999-2008
                                                                                                                                           Change in Employee Jobs, GB




                                                                            2002 June
                                                                      2002 September
                                                                       2002 December
                                                                          2003 March
                                                                            2003 June




                                             All low-paying sectors
                                                                      2003 September
                                                                       2003 December
                                                                          2004 March
                                                                            2004 June
                                                                      2004 September
                                                                       2004 December
                                                                          2005 March
                                                                            2005 June



                                             Whole economy
                                                                      2005 September
                                                                       2005 December
                                                                          2006 March
                                                                            2006 June
                                                                      2006 September
                                                                       2006 December
                                                                          2007 March
                                                                            2007 June
                                                                      2007 September
                                                                       2007 December
                                                                          2008 March
                                                                            2008 June
                                            23
                                                                                                                                                                          Number of jobs in low-paying sectors has
                                                                                                                                                                         been increasing faster than whole economy
       Some low-paying sectors continued to
        perform well up to September 2008
                                              Change on   Annual growth Change on
                                    September September since September September
Levels (thousands)                       2008      2007            2007      2006                              • Recent
All sectors                               26,400              -8                   -0.0%             216       growth
All low-paying                             8,400              38                    0.5%              45       concentrated
Retail                                     3,298              -2                   -0.1%             -16       in social
Retail (excluding motor)                   2,759               3                    0.1%              -8       care and
Hospitality                                1,775              -9                   -0.5%              -6       agriculture
Social care                                1,185              23                    2.0%              49
Cleaning                                     495               7                    1.4%               1       • Retail was
Agriculture                                  264              19                    7.5%              18       stable but
Security                                     176               5                    2.6%              10       hospitality in
Textiles, clothing                            90              -3                   -3.5%              -8       decline.
Food processing                              350              -6                   -1.7%              -6
Leisure, Travel and Sport                    641               1                    0.2%               1
Hairdressing                                 127               5                    4.0%               4
Source: ONS Employee Jobs, not seasonally adjusted, Great Britain, 1998–2008.
Notes: 1) As a result of the break in the employee jobs series between December 2005 and September 2006, changes
between periods prior to December 2005 and after September 2006 cannot be estimated.
2) The social care and leisure, travel and sport sectors do not align exactly to the LPC's specification of the low-paying
                                                                                                                           24
sectors due to the breakdowns of employee jobs provided by the ONS.
                                                                                                                           Change in employment on a year earlier (thousabds)




                                                                                                                                     -100
                                                                                                                                      -50
                                                                                                                                      100
                                                                                                                                      150
                                                                                                                                                       200
                                                                                                                                                             250
                                                                                                                                                             300
                                                                                                                                                                   350
                                                                                                                                                                         400
                                                                                                                                                                         450
                                                                                                                                                                               500




                                                                                                                                        0
                                                                                                                                       50
                                                                                                                           2000 Q1
                                                                                                                           2000 Q2
                                                                                                                           2000 Q3
                                                                                                                           2000 Q4
                                                                                                                           2001 Q1
                                                                                                                           2001 Q2
                                                                                                                           2001 Q3
                                                                                                                           2001 Q4
                                                                                                                           2002 Q1
                                                                                                                           2002 Q2
                                                                                                                           2002 Q3
                                                                                                                           2002 Q4
                                                                                                                           2003 Q1




                                                                                                          Public Sector
                                                                                                                           2003 Q2
                                                                                                                           2003 Q3
                                                                                                                           2003 Q4
                                                                                                                           2004 Q1
                                                                                                                           2004 Q2
                                                                                                                           2004 Q3
                                                                                                                           2004 Q4
                                                                                                                                                                                                       affecting women




                                                                                                                           2005 Q1
                                                                                                                           2005 Q2

                                                                                                          Private Sector
                                                                                                                           2005 Q3
                                                                                                                           2005 Q4
                                                                                                                           2006 Q1
                                                                                                                           2006 Q2
                                                                                                                           2006 Q3
                                                                                                                           2006 Q4
Source: ONS, LFS and estimates from public sector organisations, not seasonally adjusted, UK, 2000-2008



                                                                                                                           2007 Q1
                                                                                                                           2007 Q2
                                                                                                                           2007 Q3
                                                                                                                           2007 Q4
                                                                                                                           2008 Q1
                                                                                                                           2008 Q2
                                                                                                                                                                                     Public sector employment has been falling – adversely




                                                                                                          25
            Bank of England GDP Forecast (February 2009)
                                  - probably still highly optimistic
                                                                                                                                                     • This is much more
                                                                                                                                                     pessimistic than the
                                                                                                                                                     November Inflation
                                                                                                                                                     Report.
                                                                                                                                                     • The recession is
                                                                                                                                                     now forecast to be
                                                                                                                                                     much deeper and
                                                                                                                                                     longer.
                                                                                                                                                     • It is now forecast
                                                                                                                                                     to last until Q1 2010
                                                                                                                                                     with GDP falling by
                                                                                                                                                     over 3% in the year
                                                                                                                                                     to Q1 and Q2 2009.
The fan chart depicts the probability of various outcomes for GDP growth. To the left of the first vertical dashed line, the distribution reflects the likelihood of revisions to the data over the past;
to the right, it reflects uncertainty over the evolution of GDP growth in the future. If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective
judgement is that the mature estimate of GDP would lie within the darkest central band on only 10 of those occasions. The fan chart is constructed so that outturns are also expected to lie
within each pair of the lighter green areas on 10 occasions. Consequently, GDP growth is expected to lie somewhere within the entire fan on 90 out of 100 occasions. The bands widen as the     26
time horizon is extended, indicating the increasing uncertainty about outcomes. See the box on page 39 of the November 2007 Inflation Report for a fuller description of the fan chart and what
it represents. The second dashed line is drawn at the two-year point of the projection.
     What implications of the recession for
               gender equality?
• Adverse implications for women from:
   – Recessions hit less skilled more than more skilled in terms of
     both employment and wages
   – Weakening of employment in public sector
   – High proportion in part-time employment
• But, against this:
   – Past recessions hit consumer durables more than services
   – Employment in low-paid sectors has so far been more resilient
   – High proportion of women in public sector
• National Minimum Wage should provide effective
  support for low wages and for the gender pay gap
   – Will the NMW be allowed to keep up with average earnings in
     the recession?

                                                                      27

				
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