Job Vacancies & Rates of Pay in Greater Manchester

Published in Bottomline, Winter 2007

Our 2006 annual survey of vacancies held at Jobcentres in Greater Manchester found that the number of vacancies has remained at a high level and that there is a greater variety of jobs on offer. However, Jobcentre vacancies are still predominantly low-paying and provide low levels of weekly income.

Every year since 1989 Greater Manchester Pay and Employment Rights Advice Service has undertaken Jobcentre vacancy surveys in Greater Manchester. Jobcentre vacancy surveys provide detailed and unique data on the local labour market and the findings inform debate about future government labour market policies.

Number and types of jobs

In April 2006 there were 10,753 local jobs available in the ten main Jobcentres in Greater Manchester. Between 2005 and 2006 there is a difference in the number of vacancies of 9.8%.

Not only has the number of vacancies remained stable after the 68.6% increase from 2003 to 2004 but also the composition of vacancies is similar to the preceding year.

• The proportion of jobs that are skilled trades jobs has increased once more from 8.1% in 2005 to 9.1% in 2006.
• The proportion of managerial and professional jobs have increased for the third year running to 7.5% and 5.1% respectively.
• The proportion of catering, cleaning, shop work and factory jobs have all decreased in recent years and now make up less than a fifth of all vacancies.
• Office jobs now represent over a quarter of all vacancies.

There has been a significant change in the composition of vacancies in recent years. For the fourth year in succession office work vacancies made up the highest proportion of jobs available. Office work jobs now make up over a quarter (26.9%) of all vacancies. There was a dramatic decrease in the number of catering vacancies over the last two years, and their contribution to the overall number of vacancies is now 8.5%. This contrasts starkly with the late 1990s, when these vacancies made up one in five of all jobs.

The same six occupational groups; office work, catering (including hotel jobs), shop work, sales, cleaning and care work have made up the majority of job centre vacancies between 1999 and 2003. This changed in 2004 and the same trend has continued in 2006. Office work, catering, sales and care work are still in the top six occupational categories comprising over half (55.3%) of all vacancies. However, there has been a notable increase in managerial vacancies from 2.8% in 2003 to 7.5% in 2006. Skilled trades have also increased from 6.8% in 2003 to 9.1% in 2006. Shop work has decreased significantly from 7.5% in 2003 to 2.4% in 2006. A fifth (21.4%) of Jobcentre vacancies are low paid such as catering, cleaning, care work and shop work but skilled trade, managerial and professional vacancies make up a higher proportion of all vacancies (21.7%) than in preceding years. Overall the low paid occupations are steadily decreasing as an overall proportion of all vacancies since the number of vacancies advertised in Jobcentres in Greater Manchester has risen due to vacancies being advertised via the internet.

Many of the jobs traditionally seen as male jobs (skilled trades, driving, security, motor trade and engineering) accounted for 17.6% of all vacancies. Among these 'male' occupations, skilled trades and engineering are generally the best paid. The highest paid occupations in the survey were professional and nursing jobs but these two categories represented only 5.6% of all vacancies.

Hourly pay

Average hourly pay for all jobs (where an hourly pay rate was given) was £7.40. For full-time jobs it was £7.65 and for part-time jobs £6.35. Inflation rose by 2.5% over the last year and this means that the real change in average hourly pay was +3.8% for all jobs, +2.1% for full-time jobs and +7.1% for part-time jobs.

The real increase in the average hourly pay of full-time jobs was less than the real increase in the average hourly pay of part-time jobs. This has decreased the gap between the hourly pay rates of full and part-time jobs. On average those who work part-time will earn only 62% of the hourly earnings of full-time workers. In 1992 those who worked part-time earned on average 85% of the hourly earnings of full-time workers.

Impact of the minimum wage on hourly pay rates

In the first half of the 1990s there was very little increase in average hourly pay in real terms, in fact between 1992 and 1993 average hourly pay actually fell in real terms. The first significant increase in average hourly pay occurred between 1998 and 1999 when average hourly pay for all jobs increased by over 6%. This was undoubtedly a result of the introduction of the minimum wage in April 1999.

Whilst average earnings have increased much faster since the implementation of the minimum wage than in the years prior to its introduction, the level of the increase is strongly influenced by the level of the increase in the minimum wage. For example, between the April 2001 and April 2002 survey, the minimum wage increased by 40p from £3.70 to £4.10, an increase of 10.8%, and the Jobcentre survey found an increase in average hourly pay of 8%. In the years when the increase in the minimum wage has been small, for example, between the April 2000 and April 2001 survey when the minimum wage increased by 10p or 2.8% from £3.60 to £3.70, the Jobcentre survey recorded an increase in average hourly pay of 4%. Similarly between the April 2002 and April 2003 survey the minimum wage again increased by only 10p (2.4%) from £4.10 to £4.20 and the Jobcentre survey recorded an increase in average hourly pay of 5.2%. Between the April 2003 and April 2004 survey the minimum wage increased by 30p from £4.20 to £4.50 and the Jobcentre survey recorded an increase in average hourly pay of 6.9%. Last year between the April 2004 and April 2005 survey the minimum wage increased by 35p from £4.50 to £4.85 and the Jobcentre survey recorded an increase in average hourly pay of 6.6%. This year between the April 2005 and April 2006 survey the minimum wage increased by 20p from £4.85 to £5.05 and the Jobcentre survey recorded an increase in average hourly pay of 3.8%.

The minimum wage continues to have a positive impact on hourly pay rates. Table 1 shows the proportion of jobs paying exactly the minimum wage (£5.05 at the time of the survey), above the minimum wage and over £5.35 (the new minimum wage from October 2006).

Table 1: Proportion of jobs in hourly pay bands relating to the minimum wage

One concern when the minimum wage was proposed was that it would turn into a maximum wage and that employers previously paying less than the minimum wage would now only pay the minimum wage and not a penny more. The table shows that this has not proved to be the case. In 2006 7.0% of vacancies were paying exactly £5.05 an hour, a significant decrease from the 2004 survey when 14.1% of all the vacancies were paying exactly £4.50.

This indicates that for most employers the increase in the minimum wage between 2005 and 2006 was relatively easy to comply with and that in fact most employers over the year raised the pay rates by more than the increase in the minimum wage. The majority of employers were in fact paying more than the minimum wage, 91.4%, an increase on the 2005 figure of 90.4%. It is still the case that, as we have reported in previous surveys, most employers can easily afford to pay above the minimum wage.

The table also looks at the likely impact of the October 2006 increase in the minimum wage from £5.05 to £5.35 which came into effect after the fieldwork for this survey was conducted. It is encouraging to note that 84.8% of all vacancies paid above £5.35 an hour, six months ahead of the increase. Full-time jobs were more likely to be paying above £5.35 an hour, with 90.6% of full-time jobs in this position compared with 60.6% of part-time jobs.

Weekly income

Even jobs which have a reasonable hourly rate of pay may not bring in much income if the hours to be worked are low. The amount which a job pays per week is of as much importance to a person looking for a job as the hourly rate. Average weekly income in 2006 was £260.95, the average for full-time jobs was £296.04 and the average for part-time jobs was £106.54.

Many of the jobs provided a low level of weekly income and would not enable workers to become independent of the benefits and tax credits system.

• 7.4% of all the vacancies paid below the Lower Earnings Limit (LEL) of £84, with 39.8% of part-time vacancies paying below this level. This means that workers taking these jobs would not be entitled to any contributory social security benefits such as statutory sick pay, statutory maternity or paternity pay, adoptive pay, jobseekers allowance and state pension.
• 17.9% of all jobs (including 89.5% of part-time jobs) on offer paid below £168.56, which is the entitlement of a family with two adults and two young children.
• Over seven in ten of all jobs on offer (68.1% of all full-time jobs and 98.7% of part-time jobs) paid below the level at which a typical family (a couple with two young children paying average council house rent and council tax) would stop being eligible for Working Tax Credit.

Temporary jobs

Since 1998 the proportion of temporary jobs has remained stable at around 10%. This year for the fourth year in succession, it has remained stable at around 15% and this figure is three times the 1989 figure.

Many of the temporary jobs are in occupations which are traditionally higher-paid such as skilled trades and professional. When the pay data is analysed excluding temporary vacancies the effect is to reduce both average hourly pay and average weekly pay. When temporary jobs were excluded from the analysis:

• average hourly pay fell by 1.8% from £7.40 to £7.27
• average weekly pay fell by 1.2% from £260.95 to £254.97.

One important reason for temporary jobs having a slightly higher average rate of pay than permanent jobs is that the insecure nature of non-permanent jobs is often compensated by slightly higher pay rates. However, their insecurity or short duration will probably still make them unattractive to many jobseekers.

Comparisons between districts

The types of jobs available and the pay rates and hours of work associated with these jobs varied widely across the ten districts of Greater Manchester. Table 2 shows average hourly and weekly rates of pay by district.

Table 2: Pay rates by district

Average hourly pay rates varied considerably across the county, from a high of £7.83 in Manchester to a low of £6.97 in Wigan, a difference of 86 pence. This year nine out of ten Jobcentres had average hourly pay rates of above £7.00.

It is notable that for the fifth year in succession Manchester topped the table of average hourly pay rates. However, this year Wigan is at the bottom of the table. It is the composition of jobs in different areas which influence average hourly pay rates. Manchester had a lower proportion of low paid jobs such as care work and cleaning and a higher proportion of managerial jobs. Wigan on the other hand had a low proportion of skilled trade vacancies.

In terms of weekly pay, the highest average weekly income was recorded in Manchester (£288.55) followed by Salford (£269.72) and the lowest was recorded in Wigan (£235.15) followed by Bury (£244.76). This was a gap of just over £44, greater than the gap of over £53.40 between the highest and lowest in 2006. It should be remembered that the overall weekly average will be determined to a significant extent by the proportions of full and part-time jobs in each Jobcentre. For example Manchester recorded a low proportion of part-time jobs at 17.3% whereas Wigan and Bury had far higher proportions of part-time jobs at 31.2% and 26.2% respectively.

Conclusions

Whilst official statistics indicate that the North West labour market is growing, the Greater Manchester Jobcentre survey sheds light on the quality of the jobs available within the labour market. It is encouraging to find that the number of vacancies advertised through Greater Manchester Jobcentres is at an historically high level and that there is a greater variety of jobs on offer as well as a significant increase in skilled trades, managerial and professional vacancies. However, it is still the case that Jobcentre vacancies are dominated by low-to-medium paying occupations such as catering, cleaning, office work and sales jobs.

Jobcentre vacancies continue to offer low levels of weekly income which require tax credit top-ups to make them viable and which will leave many workers out of the protection of the National Insurance system. In addition there is a gap between the pay rates of part-time and full-time jobs and the proportion of temporary jobs is at a historically high level.

This report recommends that a number of steps could be taken at both a national and local level which would be the first step in improving the job prospects for the regions unemployed. These recommendations include:

• Prioritising the creation of quality sustainable jobs in employment programmes.
• Examining the operation of the Lower Earnings Limit in relation to entitlement to social security benefits.
• Raising the national minimum wage to a 'living' wage ensuring that dependence on state benefits and tax credits is reduced and that real inroads are made into the gender pay gap.