Key workers’ hourly wages 8% lower on average than other employees

By agency reporter
April 27, 2020

The response to the coronavirus (COVID-19) pandemic has underlined the critical role of the UK’s key workers, many of whom are in relatively low-paid sectors such as food or social care. Overall, a third of key worker employees – and 71 per cent of those in the food sector – earn £10 an hour or less, which is below the long-term target for the national living wage. But there are substantial differences between key workers in different sectors. A new Briefing Note from the Institute for Fiscal Studies (IFS) says policymakers looking to change key workers’ working conditions after the pandemic will need to recognise this.

Key workers look similar to the rest of the workforce in terms of their age, their education, and where they were born. However, they are more likely to be female and are somewhat lower-paid than other employees: the median key worker employee earned £12.26 per hour in today’s prices last year, eight per cent less than the £13.26 per hour earned by the median earner in a non-key occupation.

There are big differences between key workers in different sectors. The food and social care sectors stand out for the low wages their employees earn and the low levels of qualifications they hold. Older, self-employed farmers mean that nearly a fifth of food sector workers are aged 65 or older. Younger, migrant food processors mean that 30 per cent of workers in the sector were born somewhere other than the UK, as were a quarter of health and social care workers.

These differences translate into significant variation in key worker wages: the median earner in the food sector earned £8.59 per hour last year, 30 per cent less than the median key worker. But the median earner in key professional services – such as justice or journalism – earned more than half as much again as the average key worker, partly reflecting that nearly 80 per cent have degrees.

The wage gap between key and non-key employees has been growing over time. Average wages for key workers last year were around nine per cent per cent lower than for a similar non-key employee (after taking differences in their characteristics into account). After nearly a decade of wage restraint in sectors like education and public order, that is nearly twice as large as the five per cent gap in 2010.

Christine Farquharson, a Senior Research Economist at IFS, said: "Key workers are essential to the UK’s response to the COVID-19 pandemic, and they have certainly earned our gratitude. Compared to similar workers in non-key occupations, the average key worker earns around nine per cent less per hour. But while some key worker sectors have very low pay – those in the food sector earn just £8.59 per hour on average – other key workers earn much more. Any policy plans to change key workers’ working conditions after the pandemic has passed will need to take these differences into account."

* Read the IFS briefing note Differences between key workers here

* Institute for FIscal Studies https://www.ifs.org.uk/

[Ekk'6]

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