Low paid workers have been handed their biggest pay rise since the 1990s, after the introduction of the “national living wage” which forced companies to pay workers aged 25 and over a minimum £7.20 an hour.
The bottom 10 per cent of earners received a 4.4 per cent increase in the year to April, while the boost for the bottom five per cent of earners was even bigger at 6.2 per cent, according to official data.
Low pay campaigners welcomed the figures which also showed that the significant rise in low pay was most prominent among women and part-time workers, helping to close the gender pay gap at the bottom end of the pay scale.
The Resolution Foundation said the national living wage (NLW) had “well and truly made its mark on pay across Britain” and “contributed to a significant closing of the gender pay gap and a welcome fall in pay inequality”.
It said the increase was due to a combination of earnings growth – boosted by the NLW – and a low level of inflation at that time. It also reflects rises in the national minimum wage for younger workers from last October.
The TUC’s general secretary, Frances O’Grady, also said it was disappointing that the average gender pay gap was closing at a “snail’s pace”, as the pay gap between full-time male and female employees fell to 9.4 per cent from 9.6 per cent in 2015.
Frances O’Grady, said:
“We need a labour market that works better for women. This means helping mums get back into well-paid jobs after they have kids. And encouraging dads to take on more caring responsibilities. The government should also scrap tribunal fees, which stop women getting justice from bad employers who have discriminated against them.”
People working full-time in the private sector earned £517 a week on average, up 3.4%, while those in the public sector were paid £594, up 0.7% on the previous year.
Men working full-time in April earned an average of £578 per week, up 1.9 per cent on the previous year, while women were paid £480, up 2.2 per cent.