Wednesday, May 02, 2018

Different Wages

Workers in 15 of the country's largest towns and cities - defined here as built-up urban areas with 135,000 or more people - earn more than the average weekly wage of £539.

There are no prizes for guessing that salaries are highest in London, where the average weekly wage is £727. Even within cities there can be great differences - workers in Tower Hamlets, in east London, are paid an average of £952 per week, compared with £518 for those working in Sutton, on the outskirts. 

The next six highest earning places are all in the South East, with average wages of £600 or more in Reading, Crawley, Milton Keynes, Cambridge, Slough and Oxford.  With wages of almost £600 per week in Edinburgh, Aberdeen, and Derby, thanks mainly to their successful finance, oil and manufacturing industries.

The lowest pay is, perhaps surprisingly, found in another place close to London. At £413 per week, average pay in Southend is just over half that in the capital. This helps explain why so many people commute from Southend into London, with one in five of its working population making the journey. The number of people earning their money in London means that the average salary among Southend residents is £144 higher than it is for those who actually work in the town. However, Southend is one of the few places in the South East near the bottom of the pay-scale. Worthing is the only other town in the region in the bottom 10.

More broadly, there is a definite north-south divide when it comes to wages, with most - but not all - of the lowest paid towns and cities in Yorkshire and the North West of England.
Huddersfield has the second lowest wage of any large town or city, with its workers earning £424 per week on average. It is followed by Birkenhead and Wigan, where workers are paid £428 and £436 respectively. Belfast (£514) and Cardiff (£505) also fall under the UK average for wages, despite being the capitals of Northern Ireland and Wales respectively.
The main reason why some towns and cities offer lower average wages is simple: they are home to fewer high paying occupations. For example, more than 12% of jobs in Reading and Milton Keynes are in high-income senior management roles, which pay an average £915 per week in the UK. Only 6% of jobs in Stoke and Hull are in this category, with just over 8% in Glasgow and Swansea. Wigan, Barnsley and Doncaster - all of which feature in the bottom 15 - have some of the lowest shares of residents educated to degree level. Swansea and Belfast have some of the highest levels of residents who have no formal qualifications whatsoever.
Workers in jobs classed by the Office for National Statistics as "elementary occupations" - such as cleaners and security guards - are paid less in Plymouth and Warrington (£205 per week) than anywhere else in the country. In Slough, people in equivalent roles are paid about twice as much. Those in "sales and customer service occupations", such as sales assistants and call centre staff, are paid least in Wigan (£207 per week) and most in Crawley (£354).  The same disparities can be seen among senior managers and directors, with the lowest salaries in Southend (£615 per week) and the highest in London (£1,208 per week).
Differences in the cost of living is one, with housing in places such as London, Cambridge and Reading being much more expensive than elsewhere in the country.To attract the workers they need, businesses have to offer higher wages, especially to people at the lower end of the salary scale - which pushes up the average wage. But a bigger factor is the value people working in the same jobs in different places bring to the economy. For example, in the business services sector - which includes lawyers and architects - the average output of a worker in London, in monetary terms, is more than double that in Southend. That's because lawyers in London are more likely to be undertaking work for which they can charge bigger fees. Think corporate lawyers working in London's financial services, compared with local housing conveyancing solicitors in Southend. Similarly, the value of the work done by someone in the information and communications sector (which includes computer programmers and telephone engineers) in Reading is twice that of someone working in the same sector in Wakefield. This reflects the fact that Reading is home to many high skilled, complex roles in computing giants such as Microsoft and Hewlett Packard.
Over the past 10 years those towns and cities that have the highest paying jobs have seen the largest growth in the working age population - people aged between 16 and 64. Places such as London, Edinburgh and Milton Keynes have been able to attract significant numbers of new residents because of the jobs and wages they offer. But Burnley and Birkenhead have seen their working age populations fall, reflecting lower wages and the relative lack of career opportunities.

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