Pay rises fastest for the wealthy, ONS data shows

Pay rates have risen much faster for the wealthy in the past 25 years than for the poorest, official figures show.

The average full-time hourly rate was £12.62 in April 2011, compared to £3.87 in 1986, says the Office for National Statistics.

After adjusting for inflation, this equates to a 62% rise in wages.

But while the lowest 10% of earners have seen their hourly rates rise 47% in real terms, the highest 10% of earners have enjoyed an 81% rise.

While the top 1% of earners have seen their wages rise 117% above inflation, the bottom 1% saw a 70% increase.

In 1986, the richest segment earned eight times more than the poorest, now they earn 10 times more per hour.

Wage inequality - the ratio of the highest to lowest earners - rose between 1986 and 1998, but fell back after Tony Blair's Labour government introduced the National Minimum Wage in 1999, says the ONS.

The figures, which exclude overtime, show that the minimum wage has helped the bottom 1% achieve a real wage increase of 51% since 1998. During that same period, the top 1% of earners have seen their salaries rise by 30%.

Recession

The recent recession, which began during the financial crisis in 2008, has seen wages cut in real terms across all income groups, as pay freezes have taken their toll.

Aircraft pilots and flight engineers earned the highest average hourly rate of £44.49 in April 2011 - the highest of all professional occupations, but excluding self-employed people, such as barristers.

Bar staff and restaurant workers were the lowest paid, earning £6.25 on average per hour.

This is below the new living wage rate announced by London mayor Boris Johnson earlier this week, set at £8.55 per hour within London and £7.45 outside London.

The ONS research also highlighted the concentration of well-paid jobs in London, with just over a third (36%) of the nation's top 10% of earners working in the capital.

"Not surprisingly London, with many jobs in the financial sector, had the greatest wage inequality, with the top 1% being paid 16.2 times those in the lowest," the ONS said.

"The least inequality was in Wales, where the highest earners had wages seven times higher than the lowest."

Brendan Barber, general secretary of the TUC, said the minimum wage must continue to rise to improve the position of the lowest paid workers

"Today's figures show that while the minimum wage has provided an important pay boost to the very poorest workers, inequality has risen throughout the UK over the last quarter of a century," he said.

"The top 1% benefited most from the boom, played the biggest role in causing the crash and then protected their earnings during the recession.

"Instead the cost of the economic crisis has been passed on to workers on average incomes, who have lost over £600, while those near the bottom have suffered the sharpest loss of all," he added.

Separately on Wednesday, the pay equality campaign the Fawcett Society warned that the pay gap between men and women might soon widen for the first time on record.

Its report said that women were still earning on average 15% less than men for the same job.