Pay in Wales

Hourly Pay Rates: Wales versus Rest of UK

Wales has the lowest mean hourly pay rate of any of the devolved administrations of the UK or regions of England. Mean hourly earnings (£ per hour, all employees) by region are given in the graphic, Figure 1, below – reproduced from Figure 6 of this ONS release (2015).

Figure 1

Mean pay rates in Wales v rest of UK

Hourly Pay Rates: Gender Gap (UK)

See Hourly pay rates

Gender Pay Gap in Wales

Data has not been found for the gender pay gap versus age for workers in Wales. This is a pity because it is the age-dependence of the gender pay gap which tells the real story (see Figures 3 of Hourly pay rates).

However, the annual survey of hours and earnings (ASHE) for 2015 provides age-averaged pay rate data. Figure 2, below, shows the distribution of full time hourly pay rates, excluding overtime, for the two sexes separately. The data was taken from file “Work NUTS (3) Table 22.6a Hourly pay – Excluding overtime 2015”.

Figure 2

Gender pay gap for Wales - distribution

The salient feature of Figure 2 is the smallness of the gender pay gap compared with the gap between the highest and lowest paid employees. Part of this distribution of pay rates is due to age and experience differences; part is due to the range of types of employment, from unskilled manual workers to highly qualified professionals.

The same source gives the median hourly pay rate, excluding overtime, for the various regions of the UK. Table 1 shows these data for the two sexes separately and for Wales in comparison with the UK as a whole, and the derived gender pay gaps. As noted in Hourly pay rates women receive a higher hourly pay rate for part-time working.

Table 1: Median Gender Pay Gaps Across Whole Age Range (2013/14) Data from annual survey of hours and earnings (ASHE) for 2015file “Work NUTS (3) Table 22.6a   Hourly pay – Excluding overtime 2015”.

Category Region Hourly Pay Rate, £/hr Gender Pay Gap(2)
men women £/hr %
Full-Time UK 13.84 12.54 1.30 9.4%
Full-Time Wales 12.36 11.39 0.97 7.8%
Part-Time(1) UK 8.04 8.56 -0.52 -6.5%
Part-Time(1) Wales 7.68 8.23 -0.55 -7.2%

(1)Part time working is defined as less than 35 hours per week, or less than 30 hours per week in the education sector

(2)Gap defined as (men – women), converted to percentage of ‘men’; hence negative means women are paid more

Is There a Gender Pay Gap Net of Tax?

The answer, for the UK as a whole, appears to be “no”. For Wales the answer is “yes, but only one of negligible magnitude”.

The gender pay gap is invariably based on gross pay, not pay net of stoppages. The exact position in respect of take-home pay is difficult to determine because each individual has different tax, national insurance, etc, situations. However, income tax is the largest stoppage and so a reasonable estimate of the effect of stoppages on the typical gender pay gap can be made based on income tax alone. Consistent with Table 1 the year 2013/14 is used and income tax data taken from here, together with working hours data from here. Table 2 gives the tax data for the UK as a whole and for Wales.

The point, of course, is that men pay far more income tax than women. Men work far more hours than women, and this is the main reason why they earn more and hence attract more tax. The proportion of income paid as tax increases with earnings. Hence, for the UK as a whole, men are 57.2% of income tax payers, men account for 60.7% of hours worked, men earn 65.6% of total income, but men pay 72.9% of income tax. (See Table 2 for the Welsh figures).

The result is that, averaged over all workers, men pay £1.63 per hour more in income tax than women over the UK as a whole, or £0.60 per hour more if attention is confined to Wales.

Comparing these gender tax gaps with the gross gender pay gaps of Table 1 indicates that, for the UK as a whole, the gender pay gap net of tax is in favour of women.

For Wales, the gross gender pay gap for full time workers, £0.97/hr (Table 1) becomes a net pay gap after tax of only £0.37/hr, or 3%.

Of course, the whole of society benefits from the public expenditure funded by tax payers. However, women receive substantially more from the benefit system than men. Also, twice as many women work in the public sector as men (see Public v Private Sector). So the greater tax paid by men benefits women more than it benefits men.

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