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New study identifies the professions which have made Britain hugely unequal

Just 20 professions have been responsible for more than two-thirds of the growth in wage inequality among men in recent decades a new study has shown.

male_professionalChief executives of large organisations benefitted most, seeing their pay rise fourfold - faster than in any other occupation in Britain. Salaries in other already highly-paid jobs, including finance and medicine, also increased more sharply.

The analysis, ‘Occupations and British Wage Inequality, 1970s-2000s’, split the British workforce into 366 occupations and examined their pay levels between 1975 and 2008. It is published in the current edition of the European Sociological Review.

Author Dr Mark Williams of the London School of Economics and Political Science (LSE) analysed the three different ways in which occupations can affect wage inequality. Using a weighting system, he found that steeper wage rises in certain professions was the biggest driver, ahead of changes in the relative size of certain professions and increasingly unequal pay levels within professions.

The sharpest growth in inequality came between 1975 and 1996, with a more stable pattern thereafter.

For women, 12 professions account for half of the growth in wage inequality while the top 20 combined account for almost two-thirds of the growth in overall inequality.

Among men, the general managers (including chief executives) of large companies and organisations saw their mean hourly earnings (at 2008 levels) rise from £12.07 in 1975 to £49.20 in 1996 – the equivalent of a rise in annual salary (based on a 40-hour week) from £25,106 to £102,336. This group was responsible for more than four per cent of the national increase in wage inequality.

BusinessmanThe largest rise was attributable to marketing and sales managers who saw their mean hourly earnings rise from £11.27 in 1975 to £20.44 in 1996 – the equivalent of an annual wage increase from £20,511 to £37,200. At the same time the number of people working in the profession more than doubled to almost 450,000. The two factors combined meant the occupation was responsible for the single biggest rise in inequality, almost 10 per cent, over the period. 

Dr. Williams, a fellow in LSE’s Department of Management, said: “My research clearly shows that the biggest single reason for the growth in inequality has been that highly-paid jobs have become even more highly-paid.  This is also the first study to identify the professions which have had the biggest effect. It is very striking how just a handful of occupations, mostly managerial and professional, are responsible for more than half of the inequality increase.

“Previously many have argued that widening pay gaps within professions were the primary source of British wage inequality. This study shows that is not the case - indeed it’s the least significant of the three mechanisms by which occupations can affect the inequality of wages.”

Some of the top 20 inequality-causing occupations were less well-paid jobs, including goods vehicle drivers, kitchen porters and cleaners. In these cases, their contribution came not from sharp wage rises but because the number of people working in those fields increased – affecting the overall structure of the wages market by accentuating differences between low and high earners.

The data for the study came from the New Earnings Survey which samples one per cent of the UK workforce. Dr. Williams has analysed the data both in this paper and in associated research.

The full journal article is available at:  http://esr.oxfordjournals.org/content/early/2012/07/17/esr.jcs063.short?rss=1|

Tables setting out the top 20 inequality-producing professions for men and women appear in the appendix below.

Ends

For more information contact:

Dr. Mark Williams 020 7106 1156 or 07941 645196 m.t.williams@lse.ac.uk|

LSE Press Office 020 7955 7060, pressoffice@lse.ac.uk|

Appendix

Top twenty inequality-producing occupations 1975-1996 (men)

Occupation

Overall contribution to change in male inequality (%)

  Number employed (estimated)

 Mean annual wage (2008 £s)*

  1975

1996

   1975

1996

Marketing and sales managers

9.83

177,853

449,748

23,442

42,515

Other managers and administrators n.e.c

6.50

114,616

377,338

21,819

34,528

Underwriters, claims assessors, brokers, investment analysts

5.67

39,436

151,430

25,875

50,856

Treasurers and company financial managers

5.57

33,057

113,188

25.064

61,880

Sales assistants

4.74

211,793

352,220

12,667

12,854

General managers; large companies and organizations

4.21

2,638

37,731

25,106

102.336

Drivers of road goods vehicles

4.04

566,460

586,995

13,499

15.330

Production, works and maintenance managers

3.61

245,242

345,549

20,779

36,005

Kitchen porters, hands

2.96

23,520

45,231

11,232

10,608

Computer systems and data processing managers

2.35

35,341

96,776

23,400

46,363

Security guards and related occupations

2.33

96,825

180,990

13,562

14,061

Bank, building society and post office managers

2.31

49,338

102,079

24,814

48,256

Other financial institutions and office managers n.e.c.

2.27

123,739

191,990

23,358

39,354

Medical practitioners

2.10

35,990

76,623

32,656

56,181

Computer analyst/programmers

1.84

63,494

209,697

22,672

32,802

Bar staff

1.83

41,628

83,448

11,669

22,693

Storekeepers, warehousemen

1.79

457,457

481,759

13,291

16,120

Software engineers

1.32

27,877

82,647

23,421

35,360

Management consultants, business analysts

1.26

12,031

34,445

24,049

46,197

University and polytechnic teaching professionals

1.22

21,128

65,590

30,098

46,717

Source: NES.     *Annual wage calculated from hourly rates, assuming 40-hour week


Top twenty inequality-producing occupations 1975-1996 (women)

Occupation

Overall contribution to change in female inequality (%)

Number employed (estimated)

Mean annual wage (2008 £s)*

1975

1996

1975

1996

Cleaners, domestics

10.03

610,218

701,487

9,963

10,920

Sales assistants

7.00

572,079

930,360

8,299

11,544

Care assistants and attendants

5.74

130,716

405,822

11,461

12,501

Clerks (n.o.s.)

5.09

418,660

957,139

11,315

15,746

Marketing and sales managers

4.23

26,900

126,525

12,355

35,693

Other financial institutions and office managers n.e.c.

3.38

44,420

163,311

13,042

27,872

Other managers and administrators n.e.c

2.74

26,342

128,649

13,333

26,707

Nurses

2.69

347,861

597,302

14,726

24,773

Other childcare and related occupations

2.54

67,583

152,742

10,754

11,190

Counterhands, catering assistants

2.43

177,281

209,068

9,630

11,045

Medical practitioners

2.10

9,669

32,764

19,490

48,381

Kitchen porters, hands

1.88

132,245

121,830

9,776

10,317

Bar staff

1.84

53,594

121,041

8,424

9,901

Underwriters, claims assessors, brokers, investment analysts

1.79

11,636

50,939

13,312

32,011

Treasurers and company financial managers

1.75

6,160

29,930

13,998

40,206

Waitresses

1.56

44,277

91,017

8,778

10,046

Other secretaries, personal assistants, typists, word processor operators n.e.c.

1.53

517,627

617,326

12,147

19,344

Higher and further education teaching professionals

1.50

34,287

99,108

23,338

33,176

Solicitors

1.42

4,509

34,588

15,059

36,941

Chartered and certified accountants

1.40

18,061

50,406

12,501

31,741

Source: NES.   *Annual wage calculated from hourly rate, assuming 40-hour week

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