London’s Poverty Profile

Changes in pay inequality

What does this chart show?

This graph examines the change in pay at the bottom 10%, top 10% and middle of the earnings distribution for all jobs after inflation, measured using the CPIH.* The most notable feature across England between 2011 and 2016 is the strong growth in weekly pay at the bottom of the earnings distribution.

In London, earnings at the bottom 10% increased by 10% over this five-year period after inflation. In contrast, earnings at the median fell by 4% and earnings at the top 10% fell by 6%. London was the only region in England to have falling pay at the middle of the distribution, and also had the largest fall at the top. The region with the closest experience to London over this period was the South East, which had the second largest fall at the top 10% at 4%, and largely unchanged real median earnings.

This period includes the minimum wage rising in real terms, as well as the introduction of the government’s National Living Wage, which contributed towards strong pay performances at the bottom. Rising weekly earnings at the bottom, and declining real earnings at the 90th percentile, suggest some compression of the earnings distribution. 

* This is a version of the Consumer Price Index that includes a measure of housing costs. 


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