Overview

3.4 The sectors we consider in this Chapter (excluding childcare) account for around 6 million jobs, nearly 24 per cent of all UK employee jobs. Figure 3.1 shows the relative proportion of jobs in each of the sectors. As can be seen, nearly half are in retail and over a quarter in hospitality.

Figure 3.1

Breakdown of Jobs in Low-paying Sectors, Thousands, September 2004

Source: ONS employee jobs series, September 2004, GB.

3.5 Recent employee job trends by sector are shown in Figure 3.2. This shows that since the introduction of the minimum wage there has been strong growth in the number of employee jobs in both hospitality and security, and noticeable falls in textiles, clothing and footwear, cleaning and agriculture, hunting and forestry (referred to as agriculture in the remainder of this Chapter). In the year to September 2004 the number of employee jobs increased in most low-paying sectors, particularly security and cleaning, but fell in textiles, clothing and footwear and hairdressing. During this period the total number of jobs in the economy rose by 0.5 per cent (140,000 jobs), and the number of jobs in low-paying sectors rose by the same percentage (over 30,000 jobs). Looking at the micro level, in response to our employer survey the retail, hospitality, textiles and hairdressing and beauty (referred to as hairdressing in the remainder of this Chapter) sectors were the most likely to report reductions in staffing levels as a result of the October 2003 upratings, but the childcare and social care sectors were the least likely to report reductions. Further information on trends in employee jobs in the low-paying sectors can be found in Appendix 5.

Figure 3.2

Change in Employee Jobs in Low-paying Sectors, 1998-2004

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

3.6 Trends in self-employment by sector are given in Figures 3.3 and 3.4. They show that self-employment has increased by around 25 per cent in both the hairdressing and cleaning sectors since the introduction of the minimum wage. This represents an increase in the level of self-employment by 20,000 in hairdressing and 10,000 in cleaning. Self-employment fell by nearly 20 per cent in both hospitality and residential social care, with the levels falling by 30,000 and 3,000 respectively. However, the largest reductions in the level of self-employment were in the retail and agriculture sectors (both fell by around 35,000).

Figure 3.3

Change in Self-employment in Low-paying Sectors, 1998-2004

Source: Labour Force Survey (LFS), 1998-2004.

Figure 3.4

Number of Self-employed by Sector, Thousands, 1998-2004

Source: LFS, 1998-2004.

3.7 Table 3.1 shows that the cleaning, hospitality and hairdressing sectors have the highest percentage of employees aged 18 and over paid below or only just above the adult rate of the minimum wage. It also shows, comparing the position which applied after the upratings of 2001 with that following the October 2003 upratings, that there has been no significant change in the proportion of employees aged 18 and over being paid below or only just above the level of the adult minimum wage. The Table also illustrates the fact that a relatively high percentage of nursery nurses and employees in the hairdressing and hospitality sectors are paid below the adult rate of the minimum wage, reflecting more significant use of the youth Development Rate and exemptions from the minimum wage for apprentices in these sectors. Further information on hourly earnings in the low-paying sectors is presented in Appendix 5.

Table 3.1 Percentage of Employees Aged 18 and Over Paid the Adult Minimum Wage or Below by Sector/Occupation, 2002-2004

Source: Annual Survey of Hours and Earnings (ASHE), April 2002-2004 without supplementary information.

Note: The adult rate of the minimum wage was £4.10 per hour in April 2002, £4.20 per hour in April 2003 and £4.50 per hour in April 2004.