Earnings in Scotland – what do the latest statistics tell us?

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The latest results from the Annual Survey of Hours and Earnings (ASHE) were released on 25 October 2018. ASHE is the Office for National Statistics (ONS) main measure of earnings, it provides statistics on earnings by sex, age, occupation, industry and region. The survey uses a 1% sample of Pay As You Earn (PAYE) records at April each year, and so doesn’t include data for the self-employed.

The published headline ASHE estimates use median gross weekly earnings data for full-time employees. However, as not everyone works full-time, it is also relevant to look at wages for all employees. So, this blog looks at the gross weekly wages for all employees.

How does Scotland compare to the other nations and regions of the UK?

The 2018 figures show that median gross weekly pay for all employees in Scotland has increased by 2.5% to £453. When adjusted for inflation, using the April 2018 CPIH figure of 2.2%, wages have increased by 0.3% over the year. At £453 per week, Scotland has the highest earnings of all UK regions outside of London and the South East of England.


What about earnings for different levels of income?

ASHE provides data on earnings by deciles. Using deciles splits earners into groups of equal size, which are then ranked from the lowest to highest.

When looking at this data we can see that the bottom three deciles have seen real terms reductions over the year, while all other deciles have increased in real terms. The second top decile has actually seen the largest real terms increase, at 1.1%, while the second bottom has seen the biggest decrease at 1.8%.

As this data is for earnings pre-tax and welfare distribution, it is fair to say that what is known as “market income inequality” has increased over the year. Those at the bottom of the earnings scale are relatively worse off (before tax and transfers) whilst the highest earners have seen wage rises.


And what about earnings in different local authorities?

Data is also available at local authority level for Scotland. To control for structural differences in local authority economies, this analysis uses median hourly pay excluding overtime for all employees. ASHE provides data for place of work and residence.

When looking at place of work analysis, Edinburgh has the highest pay levels of all local authority areas, with Aberdeen and Glasgow coming in second and third. East Renfrewshire has the lowest level of place of work pay.

However, when looking at residence pay, East Renfrewshire has the highest rate of pay, underlining the importance of commuting for the area. Dumfries and Galloway has the lowest, possibly illustrating the high number of retirees living there.

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A more detailed look at the ASHE figures for Scotland will be published in November.

Andrew Aiton Data Visualisation Manager and Greig Liddell Senior Researcher Financial Scrutiny Unit