the living wage: facts and figures - scottish …€¦ · realthe scottish parliament and scottish...

16
Financial Scrutiny Unit Briefing The Living Wage: facts and figures 23 November 2016 16/94 Andrew Aiton This briefing provides statistics on the number of people earning less than the Living Wage in Scotland and looks at the number of Living Wage accredited employers. Source: Living Wage Foundation

Upload: vukiet

Post on 28-Aug-2018

217 views

Category:

Documents


1 download

TRANSCRIPT

realThe Scottish Parliament and Scottish Parliament Infor mation C entre l ogos .

Financial Scrutiny Unit Briefing

The Living Wage: facts and figures 23 November 2016

16/94

Andrew Aiton

This briefing provides statistics on the number of people earning less than the Living Wage in Scotland and looks at the number of Living Wage accredited employers.

Source: Living Wage Foundation

2

CONTENTS

EXECUTIVE SUMMARY .............................................................................................................................................. 3

THE LIVING WAGE ..................................................................................................................................................... 3

HOW MANY PEOPLE IN SCOTLAND EARN LESS THAN THE LIVING WAGE? ................................................... 4

HOW DO THE LATEST FIGURES AFFECT THE NATIONAL INDICATOR ON PAYING THE LIVING WAGE? ... 4 HOW DOES SCOTLAND COMPARE WITH THE REST OF THE UK? .................................................................. 5

ARE MEN OR WOMAN MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? ........................................... 5

WHICH AGE GROUP ARE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? ................................... 6 LIVING WAGE IN PUBLIC AND PRIVATE SECTORS ........................................................................................... 6 WHICH SECTORS ARE MORE LIKELY TO PAY LESS THAN THE LIVING WAGE? ........................................... 6 WHERE ARE PEOPLE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? .......................................... 7

HOW MANY ACCREDITED LIVING WAGE EMPLOYERS ARE THERE IN SCOTLAND? ...................................... 9

WHAT SIZE OF EMPLOYERS HAVE RECEIVED ACCREDITATION? ................................................................. 9 DOES THE PUBLIC OR PRIVATE SECTOR HAVE MORE ACCREDITED EMPLOYERS? ............................... 10 WHICH INDUSTRIES HAVE THE HIGHEST NUMBER OF ACCREDITED EMPLOYERS? ............................... 11 WHICH AREAS OF THE COUNTRY HAVE THE MOST ACCREDITED EMPLOYERS? .................................... 12

ANNEX ....................................................................................................................................................................... 13

DATA SOURCES ................................................................................................................................................... 13 Annual Survey of Hours and Earnings (ASHE) data ......................................................................................... 13 Scottish Living Wage Foundation ...................................................................................................................... 13

DATA ...................................................................................................................................................................... 13

SOURCES .................................................................................................................................................................. 15

RELATED BRIEFINGS .............................................................................................................................................. 16

3

EXECUTIVE SUMMARY

This briefing provides statistics on the number of people earning less than the Living Wage in Scotland and looks at the number of Living Wage accredited employers.

Key Points:

There are 467,000 employees who earn less than less the Living Wage in Scotland. This has increased by 7,000 over the year.

Scotland has the third lowest proportion of employees earning less than the Living Wage across the UK, at 20.1%.

Women are more likely to earn less than the Living Wage.

The “accommodation and food services” and “wholesale and retail trade” sectors have the highest proportion of people earning below the Living Wage.

90% of accredited Living Wage employers are small or medium sized which means they employ 250 or less people.

50% of Living Wage accredited employers in Scotland are registered in Scotland’s four biggest cities.

THE LIVING WAGE

The “real Living Wage” is an independently set hourly rate which is calculated according to the basic cost of living in the UK. These figures are calculated annually and announced in November. The calculation is done by the Resolution Foundation and overseen by the Living Wage Commission, based on the best available evidence on living standards in London and the UK. For more information on the calculation see SPICe Living Wage briefing (SPICe 2015). The real Living Wage is a voluntary rate which employers pay their staff £8.45 per hour. The National Living Wage was introduced by the UK Government from 1 April 2016. This requires employers to pay all staff aged 25 and over a minimum of £7.20 per hour. In order to avoid confusion this briefing looks at statistics for the “real Living Wage” not the National Living Wage. Although the Living Wage is not compulsory, on 9 November 2016, there were 644 employers in Scotland who have received accreditation as Living Wage employers. Accreditation requires employers to pay all staff including contracted staff at least the Living Wage. Accredited employer includes some large companies such as SSE, RBS, Standard Life and Aberdeen Asset Management.

The Scottish Government has set out in its pay policy that all bodies covered by the policy must pay their staff at least the Living Wage, unless they are a Modern Apprentice (Scottish Government 2016e). This includes people directly employed by the Scottish Government as well as its agencies and NDPBs such as sportScotland, Scottish Court Service and Creative Scotland.

The Scottish Government has outlined its commitment to promoting the Living Wage in its latest economic strategy (Scottish Government 2015a). Paying all employees aged over 18 the Living Wage is the core of the Scottish Business Pledge (Scottish Business Pledge). The Government’s preference is for employers to become “accredited Living Wage employers” which extends to all members of staff including contracted and third party staff.

4

HOW MANY PEOPLE IN SCOTLAND EARN LESS THAN THE LIVING WAGE?

The latest statistics for people earning less than the Living Wage come from Scottish Government analysis of the Annual Survey of Hours and Earnings 2016 (Scottish Government 2016a). At the time of the survey the Living Wage was set at £8.25 per hour. It was increased to £8.45 in November 2016 and accredited employers have six months to bring in the uprating.

It is estimated that there are 467,000 employees earning less than the Living Wage in Scotland, or just over 20% of the work force. This is an increase of 7,000 on 2015.

Table 1: Employees (16+) earning less than the Living Wage in Scotland - 2016

Level Change on year Proportion

Change on year (%pts)

Scotland 467,000 +7,000 20.1% +0.5

Source: Scottish Government (2016a)

HOW DO THE LATEST FIGURES AFFECT THE NATIONAL INDICATOR ON PAYING THE LIVING WAGE?

Scotland Performs is the Scottish Government tool for measuring how the country is performing. It does this by measuring how the country performing against a number of Performance Target and National Indicators. One of the Indicators in Scotland Performs is: “Reduce the proportion of employees earning less than the Living Wage” The Government specifies that

a decrease of 1.5 percentage points or more suggests that the position is improving

an increase of 1.5 percentage points or more suggests the position is worsening. The increase of 0.5 percentage points over the year means that the indicator is maintaining its performance. Figure 1: The Living Wage National Performance Indicator

5

HOW DOES SCOTLAND COMPARE WITH THE REST OF THE UK?

Despite seeing an increase of 7,000 people earning less than the Living Wage, Scotland has the third lowest proportion across the UK of employees earning less than the Living Wage. The figure for London is based on the London Living Wage rate of £9.75.

Figure 2: Percentage of those in employment who earn less than the Living Wage across the UK

Source: Scottish Government (2016a)

ARE MEN OR WOMAN MORE LIKELY TO EARN LESS THAN THE LIVING WAGE?

In 2016 in Scotland, 24% of working women earned less than the Living Wage compared to 15% of men, with 64% of all people earning less than the Living Wage being women. However, the net increase in the number of people earning less than the Living Wage over the year was entirely accounted for by men.

Table 2: Men and women earning less than the Living Wage, Scotland - 2016

Level Change from 2015 Proportion

Change from 2015 (%pts)

Men 169,000 7,000 15.4% +0.6

Women 297,000 0 24.3% +0.5

Source: Scottish Government (2016a)

18.6%

19.5%

20.1%

23.2%

23.2%

23.7%

23.9%

24.9%

25.3%

25.4%

25.8%

26.4%

27.7%

29.5%

South East

London

Scotland

England

UK

East

South West

Wales

North West

North East

West Midlands

Yorkshire & The Humber

East Midlands

Northern Ireland

6

WHICH AGE GROUP ARE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE?

The 18-24 year old age group has the highest proportion of people in employment who earn less than the Living Wage, at 53%. One reason for this is that this age group are more likely to be employed in accommodation and food services jobs, which have high levels of people earning less than the Living Wage.

Table 3: Employees by age group earning less than the Living Wage in Scotland - 2016

Level Change on year Proportion

Change on year (%pts)

18-24 129,000 -1,000 52.8% 0.0

25-34 100,000 3,000 20.2% 1.1

35-49 120,000 6,000 14.3% 1.0

50+ 117,000 -2,000 15.8% -0.5

All 467,000 7,000 20.1% 0.5

Source: Scottish Government (2016a)

LIVING WAGE IN PUBLIC AND PRIVATE SECTORS

29% of private sector employees earn less than the Living Wage compared to 4% of people working in the public sector. The private sector saw an increase of 11,000 people earning less than the Living Wage over the year.

Table 4: Employees (16+) earnings the Living Wage by public/private sector in Scotland- 2016

Level Change on year Proportion

Change on year (%pts)

Public 30,000 -2,000 3.9% -0.3

Private 404,000 11,000 29.3% 1.0

Not for profit or mutual organisation

33,000 -2,000 17.2% 0.5

All 467,000 7,000 20.1% 0.5

Source: Scottish Government (2016a)

WHICH SECTORS ARE MORE LIKELY TO PAY LESS THAN THE LIVING WAGE?

The proportion of people earning below the Living Wage varies by sector. The “accommodation and food services” and “wholesale and retail trade” have the highest proportion of people earning below the Living Wage.

7

Figure 3: Proportion of people earning less than the Living Wage by sector, Scotland – 2016

Source: Scottish Government (2016a)

WHERE ARE PEOPLE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE?

Of all local authority areas, Dumfries and Galloway has the highest proportion of employees earning below the Living Wage. The City of Edinburgh council has the lowest proportion of people earning below the Living Wage. West Dunbartonshire has seen the biggest decrease in the proportion of people earning less than the Living Wage, whilst Argyll and Bute has seen the biggest increase.

The variation across local authorities reflects the predominance of certain types of jobs and industries in specific areas. For example, Edinburgh has a higher proportion of people employed in sectors such as “professional, scientific and technical” service and “administrative and support services”. Meanwhile Dumfries and Galloway has a higher proportion of total workforce working in the “Wholesale, retail and repairs” where people are more likely to be paid less than the Living Wage.

8

Figure 4: Proportion of people earning less than the Living Wage by local authority – 2016

Source: Scottish Government (2016a)

9

HOW MANY ACCREDITED LIVING WAGE EMPLOYERS ARE THERE IN SCOTLAND?

The Scottish Government has set the target of having 1,000 accredited Living Wage employers in Scotland by the end of September 2017. Accreditation requires employers to pay all staff, including contracted staff, at least the Living Wage. At the time of writing this briefing there were 644 accredited Living Wage employers in Scotland (Scottish Living Wage Accreditation Initiative).

While this briefing looks at accredited employers in Scotland, the Living Wage is a UK wide initiative. This means there are employers in Scotland, like Lidl and Ikea, which have received accreditation elsewhere in the UK, and so will not appear in these statistics. Also, there might be employers in Scotland who are paying the Living Wage but have not applied for accreditation.

More information on accreditation and the latest data on Scottish employers which have received accreditation can be found on the Scottish Living Wage website.

WHAT SIZE OF EMPLOYERS HAVE RECEIVED ACCREDITATION?

90% of accredited employers are small or medium sized which means they employ 250 or less people. The majority of these are small and micro employers which employ between 1 and 50 people, making up 75% of the total number of accredited employers.

As part of her recommendation in Shifting the Curve (Scottish Government 2016c), Naomi Eisenstadt, Independent Advisor on Poverty and Inequality to the Scottish Government, suggested that:-

“More should also be done in particular to encourage more medium- and large-sized employers to pay the Living Wage. This is likely to be the best way of boosting the numbers of people who get the Living Wage, and larger organisations often have greater capacity to absorb costs.”

Large employers (with more than 250 employees) make up 10% of the total number of accredited employers while medium-sized employers (with 51-250 employees) make up 15%.

Figure 5: Proportion of accredited employers by number of employees

Source: Scottish Living Wage Accreditation Initiative.

Employment by employer size varies by industry. For example in the “Accommodation and food service” industry, where 70% of people earn less than the Living Wage, 52% of employment

0%

10%

20%

30%

40%

50%

1 to 10 11 to 50 51 to 250 251 to 500 500+

10

comes from small businesses, which employ less than 50 people. But in the “wholesale and retail” industry, where 46% of people earn less than the Living Wage, 70% of employment comes from medium and large sized businesses which employ more than 50. (SPICe analysis of Scottish Government 2016b)

DOES THE PUBLIC OR PRIVATE SECTOR HAVE MORE ACCREDITED EMPLOYERS?

The Living Wage Foundation classifies employers into three sectors; private, third and public. Based on this classification the majority of employers are in the private sector.

Whilst all public bodies which are covered by the Scottish Government pay agreement have to pay those directly employed at least the Living Wage, they are not all accredited employers. There are however a number of public sector employers which have received accreditation including 13 local authorities, the Scottish Government and the Scottish Parliament.

Figure 6: Accredited Living Wage employers by sector, Scotland 2016

Source: Scottish Living Wage Accreditation Initiative.

Breaking down these figures by employer size shows that the majority of accredited employers are in the private sector. However public sector bodies are also more likely to be large employers.

In Shifting the Curve it was pointed out that, in December 2015, of the 439 accredited employers in Scotland only 11 were large private sector employers (Scottish Government 2016c). There are currently 14 large private sector employers in Scotland with Living Wage accreditation. Figure 7: Accredited Living Wage employers by sector and size, Scotland 2016

Source: Scottish Living Wage Accreditation Initiative.

59%30%

11%

Private

Third Sector

Public

0%

20%

40%

60%

80%

Private Public Third SectorSME Large

11

WHICH INDUSTRIES HAVE THE HIGHEST NUMBER OF ACCREDITED EMPLOYERS?

Charities have received the highest number of accreditations in Scotland. Retail and Hospitality have been highlighted as two industries which traditionally have low pay. So far, 54 employers across these industries have become accredited employers with no large retail and hospitality employers having received accreditation at the time of writing.

Figure 8: Number of accredited Living Wage employers by selected industry, Scotland 2016

Source: Scottish Living Wage Accreditation Initiative.

0 20 40 60 80 100 120

Charity

Other

Professional Services

Construction

Hospitality

Retail

Housing

Tech

Public Bodies

Care

Education

Health

Engineering

Law

Consulting

Local Authority

Manufacturing

Finance

Media/Communications

Wholesale

Small Medium Large

12

WHICH AREAS OF THE COUNTRY HAVE THE MOST ACCREDITED EMPLOYERS?

50% of Living Wage accredited employers in Scotland are registered in Scotland’s four biggest cities with Glasgow and Edinburgh accounting for 24% and 21% respectively.

Figure 9: Number of accredited employers by Local Authority-

13

ANNEX

DATA SOURCES

Annual Survey of Hours and Earnings (ASHE) data

The data in this briefing are taken from the Annual Survey of Hours and Earnings (ASHE) 2016 provisional results, published by the Office of National Statistics (2016a). The survey provides a range of earning statistics for employees across the UK. It does not cover the self-employed. ASHE is based on a 1% sample of employee jobs taken from the Pay As You Earn (PAYE) records of Her Majesty Revenue and Customs (HMRC) covering the pay period over the year to 5 April 2014. Key points about the data:

Because of the potential for sampling errors for smaller groups, including local areas and small industries, there is a wider margin of error for the data on gender and public/private sectors than for Scotland as a whole.

At the time of the 2016 survey the UK Living Wage was £8.25 per hour. It is now £8.45 for the UK.

The figures quoted in this briefing are calculated using hourly earnings excluding over-time.

Scottish Living Wage Foundation

The data for accredited real Living Wage employers comes from the Scottish Living Wage Accreditation Initiative. The data was extracted from the accredited employers page on 9

November 2016.

DATA

Table A1: Employees earning less than the Living Wage by sector, Scotland – 2016

Level Change on year

Proportion Change on year (%pts)

Accommodation and food service 80,000 -3,000 69.9% 1.7

Wholesale and retail trade; Repair of motor vehicles and motorcycles

141,000 3,000 46.2% -0.3

Other service 12,000 0 40.3% 0.7

Administrative and support service 47,000 4,000 37.5% 4.5

Arts, entertainment and recreation 14,000 0 26.4% -1.8

Agriculture, Forestry and Fishing 3,000 0 19.0% -3.1

Human health and social work 70,000 2,000 16.6% 0.9

Manufacturing 27,000 -1,000 16.2% -0.3

Transportation and storage 12,000 3,000 12.6% 3.4

Professional, scientific and technical 13,000 2,000 10.4% 1.7

Construction 8,000 2,000 8.8% 1.1

Education 27,000 -3,000 7.2% -0.6

Source: Scottish Government (2016a)

14

Table A2: Employees earning less than the Living Wage by place of work, Scotland - 2016

Level

Change on year

Proportion Change on year (%pts)

Aberdeen City 28,000 4,000 18.5% 2.9

Aberdeenshire 18,000 0 21.9% -0.6

Angus 7,000 -2,000 24.3% -6.3

Argyll and Bute 8,000 2,000 23.3% 5.1

City of Edinburgh 47,000 2,000 15.5% 1.4

Clackmannanshire 4,000 0 24.9% 0.3

Dumfries and Galloway 18,000 1,000 30.7% 0.6

Dundee City 16,000 2,000 20.3% 3.5

East Ayrshire 11,000 -1,000 25.4% -1.5

East Dunbartonshire 5,000 0 28.0% 4.2

East Lothian 7,000 0 22.0% -1.2

East Renfrewshire 6,000 1,000 29.3% -1.1

Falkirk 11,000 -3,000 18.9% -2.7

Fife 28,000 -4,000 22.1% -1.3

Glasgow City 65,000 -2,000 17.6% 0.7

Highland 19,000 -4,000 19.3% -3.3

Inverclyde 6,000 -1,000 22.1% -2.0

Midlothian 5,000 -1,000 17.0% -6.3

Moray 8,000 0 22.9% 0.1

Na h-Eileanan Siar N/A N/A N/A N/A

North Ayrshire 11,000 0 27.7% 1.8

North Lanarkshire 22,000 -3,000 19.8% 0.4

Orkney Islands N/A N/A N/A N/A

Perth and Kinross 16,000 3,000 24.1% 3.4

Renfrewshire 17,000 1,000 21.6% 1.5

Scottish Borders 9,000 0 23.9% -2.7

Shetland Islands N/A N/A N/A N/A

South Ayrshire 13,000 3,000 28.2% 4.5

South Lanarkshire 22,000 5,000 18.7% 0.9

Stirling 9,000 1,000 22.6% 2.5

West Dunbartonshire 5,000 -2,000 16.3% -8.7

West Lothian 16,000 -2,000 17.6% -2.3

Source: Scottish Government (2016a)

15

SOURCES

Aiton, A, Campbell, A and Liddell, G, SPICe (2015), The Living Wage, Available at: http://www.scottish.parliament.uk/parliamentarybusiness/87702.aspx Accessed 15 November 2016] Scottish Government (2016c), Independent Advisor on Poverty and Inequality, Shifting the Curve, A Report to the First Minister. Available online at: http://www.gov.scot/Resource/0049/00492430.pdf [Accessed 9 November 2016] Scottish Business Pledge, Living Wage, Available online at: https://scottishbusinesspledge.scot/living-wage/#ffs-tabbed-15 [Accessed 9 November 2016] Scottish Government (2015a), Scotland’s Economic Strategy. Available online at: http://www.gov.scot/Resource/0047/00472389.pdf [Accessed 10 November 2016] Scottish Government (2016a), Analysis of Annual Survey of Hours and Earning data for Scotland. Available online at: http://www.gov.scot/Topics/Statistics/Browse/Labour-Market/Earnings [Accessed 10 November 2016] Scottish Government (2016b), Businesses in Scotland 2016, Available online at: http://www.gov.scot/Topics/Statistics/Browse/Business/Corporate [Accessed 10 November 2016] Scottish Government (2016c), Independent Advisor on Poverty and Inequality, Shifting the Curve, A Report to the First Minister. Available online at: http://www.gov.scot/Resource/0049/00492430.pdf [Accessed 9 November 2016] Scottish Government (2016d), National Indicator: Living Wage. Available online at: http://www.gov.scot/About/Performance/scotPerforms/indicator/livingwage [Accessed 9 November 2016] Scottish Government (2016e), Public Sector Pay in Scotland - Pay for Staff - Public Bodies covered Available online at: http://www.gov.scot/Topics/Government/public-sector-pay/staff-pay/public-bodies-covered [Accessed 22 November 2016] Scottish Living Wage Accreditation Initiative, Accredited Employers, Available online at: http://scottishlivingwage.org [Accessed 9 November 2016]

16

RELATED BRIEFINGS

SB 15-14 The Living Wage SB 16-72 Disposable Household Income in Scotland 2014 SB 16-92 Earnings in Scotland 2016

Scottish Parliament Information Centre (SPICe) Briefings are compiled for the benefit of the Members of the Parliament and their personal staff. Authors are available to discuss the contents of these papers with MSPs and their staff who should contact Andrew Aiton on extension 85188 or email [email protected]. Members of the public or external organisations may comment on this briefing by emailing us at [email protected]. However, researchers are unable to enter into personal discussion in relation to SPICe Briefing Papers. If you have any general questions about the work of the Parliament you can email the Parliament’s Public Information Service at [email protected]

Every effort is made to ensure that the information contained in SPICe briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated or otherwise amended to reflect subsequent changes.

Published by the Scottish Parliament Information Centre (SPICe), The Scottish Parliament, Edinburgh, EH99 1SP

www.parliament.scot