Huge pay gap in hourly rates between full time and part time workers

Daniel Wilson shutterstock_95849584-1-2-1People working part time are paid a little over half the hourly rate of those working in full-time employment, and the gap between full time and part time rates is wider in London than any area of the country.

Latest figures for earnings from the Office for National Statistics show that the median hourly rate in London is £9.22 if you work part time but £16.16 for those with a full-time job.

A quarter of the jobs in London are part time and many of them are low skilled. That’s 1.24 million jobs, with some people doing more than one to make up full time hours but being paid a fraction of what they might earn as a full time employee.

In London the gap in hourly rates of pay is 43% but in every other region of the country it is 40% of less. In the South West of England part time workers earn an hourly rate of 68% the full time rate, compared to 57% in London.

The median hourly rate for part time work in the capital is just 14p higher than the next nearest region, the South East of England, but £1.20 higher than the lowest paid region, the North East.

Hourly earnings part time regional

The figures are based on a sample of PAYE records and the ONS calculates a median, or mid point, rather than an average, which might be distorted by a small number of very high rates.

People living in Newham have a lower hourly part time rate than any region of the country and are typically being paid less than those living in Newcastle or Sunderland, where the cost of living is lower.

The rate is only a little higher in neighbouring Tower Hamlets and across the capital median hourly rates for part time workers are below the London Living Wage in 15 of the 33 boroughs – Croydon, Merton, Greenwich, Lambeth, Tower Hamlets, Newham, Barking and Dagenham, Hounslow, Ealing, Brent, Camden, Hackney, Haringey, Enfield and Waltham Forest.

Hourly earnings part time map

The Greater London Authority sets the London Living Wage. It is a voluntary rate and promoted by the Mayor, who is trying to get employers to sign up. At the time of the earnings survey in April the London Living Wage was £9.15. It was increased to £9.40 in October.

As previously reported by Urbs, there are three quarters of a million jobs in London paying less than the Living Wage.  Data shows that women are more likley than men to be in low paid work, and nearly half of those working for less than the London Living Wage are under 24.

Source data

See also

Lowest paid living in Newham as rates remain static across capital

Over 750,000 jobs pay less than the living wage in the capital

Buying a home gets further out of reach, now 11 times annual salary

 

 

Lowest paid living in Newham as rates remain static across capital

Pay ShaunWilkinson shutterstock_207548536-1-2

Photo: Shaun Wilkinson ┃Shutterstock.com

The lowest paid full time workers in London appear to be living in Newham. Hourly rates of pay for residents of the East London borough are lower than the typical rate for the UK generally at £12.90.

People living in the City of London or the best-paid borough, Westminster, are typically earning in excess of £250 per week more with an hourly rate of pay over £20.

The figures are revealed in the Annual Survey of Hours and Earnings from the Office for National Statistics. They are based upon a sample of PAYE tax records and are considered the most reliable guide to pay rates.

Newham is not the only London borough where the median pay rate is below the rate for the UK generally. In Barking and Dagenham the full time hourly rate is £13.31, that’s 5p per hour below the UK median rate.

In contrast, across the river from Newham, the hourly rate in Greenwich is £3 higher.

Hourly pay full time London map

The median rate in Brent is below £14 per hour. In Enfield, Haringey, Waltham Forest, Hounslow and Ealing it is below £15.

Outside the centre, rates are highest in a pocket of South West London. Kensington and Chelsea, Richmond and Wandsworth have rates above £19 per hour. In Hammersmith and Fulham it is above £18.

The ONS uses a median rate or mid point rather than calculating an average, which would be distorted by a small number of very highly paid people. The rates are before tax and do not include overtime.

Rates of pay in London remain higher than the rest of the country. The London-wide median rate for full time employment is £16.16, £1.44 per hour more than the next nearest region, the South East of England, and £4.15 more than the lowest paid region, Northern Ireland.

Hourly rates full time regional

The median rate across the UK moved very little in the past year, rising by just 1.5% but that is 5 times higher than London where the hourly rate rose by just 5p since 2014.

Source data

See also

Over 750,000 jobs pay less than the living wage in the capital

Paying the rent takes up 72% of income for private tenants

Buying a home gets further out of reach, now 11 times annual salary

Flats Tom Gowanlock shutterstock_134424665-1-2

Photo: Tom Gowanlock ┃Shutterstock.com

The cost of a home in London has risen to 11 times the annual salary. This startling statistic is revealed in the data on earnings and house prices from the Office of National Statistics.

Each April the ONS does a survey on earnings and it has just released this date revealing that the median weekly pay in London was £660 or £34,320 annually. The median is the mid point, thus avoiding the distortion of the high and low numbers in calculating an average.

Data from the Land Registry shows that the median house price in London for the same period was £379,000 or 11 times earnings.

Someone earning the median wage who had managed to save perhaps £20,000 as a deposit and then took out a maximum 4.5 times salary mortgage would still only have raised 46% of the cost of the median property. It is hardly surprising therefore that the proportion of homes bought with a mortgage is falling. As reported by Urbs, cash buyers are becoming the dominant group in some areas of central London. They are mostly older people who have sold a more expensive property, or overseas investors.

The ratio of earnings to house prices has been on a steadily upward path since the late 90s, apart from a small dip following the financial crisis of 2008. In 1997 the median house cost 4 times the median salary. That ratio has since more than doubled across the country, and nearly trebled in London.

house to earnings timeline

In some parts of London the figures are even more eye-watering.  A median price home in Wandsworth costs 17 times the median earnings of someone living in the borough. In Westminster it is 22 times and in Kensington and Chelsea the median house price is 38 times salary.

house to earnings map

The data for the rest of the country helps explain why so many people choose to move out of London. In the South East generally the ratio is 9 times earnings. That’s lower than all but the 3 London boroughs on the eastern edge of the city, Havering, Barking and Dagenham and Bexley. In the North East of England a home is just under 5 times annual salary, a ratio not seen in London since the late 90s.

house to earnings national

These ratios mean that buying a property will remain out of reach for many in the capital. The much talked about ‘generation rent’ looks like it’s here to stay.

Source data

See also

What would you do with £1.6 million in cash? Buy a house, of course

The jobs success and housing failure causing a crisis for the capital

Why the London property market is heading back to the 1970s