Earnings in Scotland: 2021 – SPICe Spotlight

SPICe Spotlight | Solas air SPICe
This blog looks at the latest data from the Annual Survey of Hours and Earnings (ASHE) published by the Office for National Statistics (ONS).
The data for ASHE is collected in April every year. Pay As You Earn (PAYE) data is first used to identify representative sub groups of employers and employees. This group is then surveyed to get information on employee hours and earnings. As the data is based on PAYE it does not include the self-employed.
Interpreting the data from ASHE has been complicated because of the pandemic. At the time of the survey in 2020 approximately 8.8 million employees were furloughed under the Coronavirus Job Retention Scheme (CJRS), compared to around 3.7 million at the time of the 2021 survey. This means that many employees saw their income fall by 20% as the CJRS only supported 80% of an employee’s wages.  The ONS estimate that around half of employers topped up wages to 100% in both years, but this still leaves a significant number of employees affected by reduced earnings.
As well as the impact of furlough, lower-paid people were at greater risk of losing their jobs during the pandemic. Fewer lower-paid people in the workforce will increase the average earnings for those who remained in work. Furthermore, both the 2020 and 2021 survey saw a lower response rate than usual. As such, ASHE estimates for 2020 and 2021 are subject to more uncertainty than normal.
The combination of furlough and fewer low paid employees mean that the overall composition of employee income changed significantly between 2019 and 2020. With this change in composition and the lower response rates in 2020 and 2021, the ONS have recommended that users should focus on longer term tends rather than comparing 2020 to 2021.
Looking at the figures for Scotland we can see that Scotland has the fifth highest median gross weekly pay for all employees across the countries and regions of the UK.
When we look at the data for Scotland over the last ten years in real-terms (adjusted for inflation) we can see that the median gross weekly pay has increased by 11%. Over the same period, median pay for full-time workers has increased by 8% and by 21% for part-time workers. The largest increase in part-time wages came between 2015 and 2016, increasing by 7%, and is likely linked to the introduction of the National Living Wage.  The Consumer Prices Index including owner occupiers’ housing costs (CPIH), which is the measure used to adjust earnings for inflation, was 1.6% in April.
In this section we look at how wages have changed in the five sectors with the highest level of employment, averaged over the last five years, in Scotland. The five largest sectors are:
When looking at real-terms gross weekly pay since 2017, we can see that earnings increased for those working in Health and social work (+15%), Wholesale and retail (+4%), and Education (+5%) Administrative and support services (+9%), but fell for those in Hospitality (-9%).
If we look at how employment has changed in these sectors it may give us an idea why these changes have happened. When we look the total number of employees in these sectors in March of each year we can see that:
If we look at the working pattern composition for these sectors it shows that:
The increase in part-time employment is likely to have had an impact on median weekly wages in the Hospitality sector. In the Health and social work sector, the Scottish Government’s commitment to paying care staff the real living wage and the £500 COVID bonus for NHS and social care staff has likely had an impact on wages within this sector in 2021.
Wages in Scotland over the last 10 years have increased in real terms, with part-time wages seeing particularly strong growth. However, we need to be careful when interpreting these statistics. The effect of the job losses in lower paying sectors, along with the introduction of the National Living Wage has impacted median wages. Furthermore, the impact of the pandemic means there is added uncertainty around the statistics for 2020 and 2021.
Andrew Aiton, Data Visualisation Manager
Enter your email address to subscribe to this blog and receive notifications of new posts by email.


Leave a Comment