Hairdressing

3.93 Official ONS data are not available on the turnover or gross value added of the hairdressing sector, although the National Hairdressers' Federation (NHF) and the Hairdressing Employers Association (HEA) believe the sector to be growing. The number of employee jobs in the hairdressing sector has remained largely unchanged at just over 100,000 in the two years to September 2004, as demonstrated in Figure 3.27. However, as noted earlier in this Chapter, there has been a noticeable rise in the level of self-employed hairdressers. In Summer 2004 there were 101,000 self-employed hairdressers, compared with 95,000 in Summer 2002 and 83,000 in Spring 1998. Moreover, the trade associations calculate that the informal economy could account for as many as a further 35,000 hairdressers.

Figure 3.27

Employee Jobs in the Hairdressing Sector, Thousands, 1998-2004

Source: ONS employee jobs series, 1998-2004, GB.

3.94 Figure 3.28 illustrates that the minimum wage continues to have an impact on the hairdressing sector, with a clear spike in the hourly earnings distribution at the adult minimum wage of £4.50 per hour in April 2004. There is a further large spike at £5.00 per hour. According to ASHE 2004a (not shown), 8 per cent of employees aged 18 and over were paid the adult rate in April 2004, and around 13 per cent of employees were paid less than £4.50 per hour. The relatively high percentage of employees paid below the adult minimum wage is consistent with our findings in previous reports and demonstrates the use of the youth Development Rate and the exemptions for apprentices.

Figure 3.28

Hourly Earnings Distribution for Employees Aged 18 and Over in the Hairdressing Sector, 2002-2004

Source: ASHE, April 2002-2004 without supplementary information.

Notes:
1. NMW label shows the adult NMW rate in April of the given year.
2. Gross hourly earnings excluding overtime.

3.95 As identified in previous reports, the biggest issue facing the hairdressing sector continues to be the impact of the minimum wage on training. Although recruitment of both skilled staff and trainees remains difficult in some areas, the NHF and HEA wrote that the vast majority of small salons remain reluctant to employ trainees above the age of 17 because of cost. They emphasised the additional costs of funding training and said that, although trainees could obtain a National Vocational Qualification level 2 within two years, they would be unlikely to have built-up a client base to contribute to the economy of the salon in less than three years. Training opportunities for older workers were severely limited. The NHF and HEA therefore proposed that all workers should be exempt from the minimum wage for the duration of the apprenticeship or accredited training. We consider the treatment of young people and trainees in Chapter 5.

'For smaller or marginal businesses ... more firms now believe that it is probably more cost efficient to entice trained personnel from other employers.... On completion of the training programme in hairdressing employees require a further period of time to gain experience, establish a commercial working speed, and develop a client base.'

NHF and HEA evidence

3.96 The NHF and HEA also suggested that changes in the minimum wage commence on a Sunday or Monday. They argued that most people on the minimum wage were paid weekly and that needless administration problems were caused from paying workers different rates during the week that the new rate took effect. We believe that no change is necessary and note that the Regulations implementing upratings include a transitional provision making clear that the provisions do not apply to any pay reference period beginning before 1 October.