Northern Ireland and the Living Wage in 2016

Sterling notes

Last week the 2016 Annual Survey of Hours and Earnings for Northern Ireland was released and some interesting results emerged. The largest increase in wages was bottom 10% of employees reflecting a welcome boost from the introduction of the National Living Wage. However, the National Living Wage should also not be confused with the real Living Wage, for which the latest rate was announced last week. For 2017 the rate will be £8.45 an hour in all parts of the UK excluding London. The ASHE figures for 2016 show that 28% of all Northern Ireland employees were paid below the Living Wage in 2016. These figures are a 1.5% increase on last year and show the limits of the ability of the governments National Living Wage to make a serious impact on Living standards.

Overall the ASHE figures showed a 2.9% increase in median gross wages weekly wages for employees in Northern Ireland compared to a 3.2% increase for the UK as a whole. Full-time wages increased at a slightly lower rate of 2.2% with a much larger 5.7% increase in part-time weekly wages. This significant increase in part-time wages was mostly confined to female workers who saw a 6% increase in weekly wages. Interestingly when wages are examined at the hourly rate, the figures show that while the female part-time hourly wage rose by 4.0% while the male part-time hourly wage actually dropped by 0.1%.

Gross hours worked by male part-time employees also fell by 1.2 per cent which is slightly perplexing at first glance. If hourly pay fell but weekly wages rose, surely hours worked would have to increase to square the circle? Not necessarily. Most of the ASHE statistics reported are gross and take into account over-time as well. This is not usually that significant to the overall results, but sometimes for certain sectors it is. Hourly pay for part-time males excluding overtime increased by 0.5%. While we don’t have reliable figures for overtime pay or hours for males in part-time work we can see that weekly pay for part-time males excluding overtime actually increased by 2.1 per cent.

Whilst this may seem a small issue in overall pay trends it is important in the context of the National Living Wage. As with all increases in statutory wage floors, there is a concern that employers will cut back in other areas such as overtime. Whilst this particular trend may be just a coincidence it will become increasingly important to monitor issues like this in pay statistics as the National Living Wage is rolled out over the next number of years.

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Paul Mac Flynn

Paul Mac Flynn is co-director of the Nevin Economic Research Institute and is based in the Belfast office. In addition to managing the Belfast office he has co-responsibility for the NERI's research programme and for its strategic direction.  

He leads on the NERI’s analysis of the Northern Ireland economy along with all research into the impact of the United Kingdom‘s departure from the European Union. Other research areas include regional productivity, the all-island economy and the future of work.

He is a graduate of University College Dublin with a BA in Economics and Politics and the University of Bristol with an MSc in Economics and Public Policy, specialising in the economic impacts of political devolution in the UK.

Contact: [email protected] or 00 44 28 9024 6214.