David Milliken

LONDON, (Reuters) – Full-time earnings rose in Britain by the highest rate since 2008. It was 4.3% higher than a year ago, but the furlough program and other distortions related COVID-19 likely pushed growth up, according to official data on Tuesday.

The annual earnings survey of the Office for National Statistics is usually considered to be the best source for British labor market data. It covers many more people than it does monthly.

Both series were affected by the furlough program, which saw millions of workers temporarily reduce their pay to avoid becoming unemployed. This was in addition to the fact that the job losses were concentrated at the lowest paid.

Tuesday’s pay growth data is consistent with the monthly statistics that show a solid picture. The Bank of England will be closely monitoring the figures for any signs of inflation pressures in the longer term as it decides whether or not to increase interest rates.

In April, the median full-time weekly salary of 611 pounds was 4.3% higher than it was a year before in cash terms. It was 1.7% lower after accounting for inflation.

Due to lower earnings during the pandemic, however, the median full-time earning in April was 0.6% below April 2020’s December end. 31,285 pounds = $43,023.

The ONS stated that “most workers saw their wages rise in 2021,” but it was particularly for those who were the most directly affected by the 2020 pandemic. This included younger employees as well as the least-paid professions.

While wages for cleaning jobs and other ‘elementary occupations like labouring and cleaning rose 7.7%, managers and directors saw no increase.

A 2% increase in minimum wage from 8.91 to 9.50 pounds per hour in April was another factor that drove up wages at the bottom end of the wage ladder. Monday’s announcement by the government saw a 6.6% hike in minimum wages to 9.50 pounds per hour, effective April 20,22.

The gender pay gap in Britain – which is the difference in hourly earnings between men and women in the UK – has widened from 7.0% to 7.9% in April 2020 to 7.9% in April 2021, however it was still below the 9.0% level pre-pandemic.

The gender pay gap doesn’t measure differences in wages between men or women working in similar jobs. It also does not adjust for different average qualifications, experiences, or sectors.

While the gender gap in pay remained close to zero among full-time workers under 40 years old, older women earned 12% more than their male counterparts. The ONS stated that previous analysis suggested this was due to less women being able to move into managerial positions.

($1 = 0.7272 pounds)