Lowest Paid Workers Bear Brunt of U.K.’s Lockdown Wage Hit

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(Bloomberg) --

The U.K.’s lowest-paid workers are seeing the biggest hit to their pay packets, adding to signs that the coronavirus crisis is widening economic inequality.

Britain’s three lowest-income industries all saw wages slump in April, according to Office for National Statistics data published Tuesday. People working in accommodation and food service activities were particularly affected, with a 10.8% drop from a year earlier to an average 224 pounds ($284) per week -- the biggest decrease of any industry.

Lowest Paid Workers Bear Brunt of U.K.’s Lockdown Wage Hit

The best-paid sectors were more mixed. While the top-paying mining industry cut wages by 3.3%, pay rose for workers in finance and insurance, as well as information and communications.

The difference is likely due to some sectors furloughing more staff than others under a government program that pays up to 80% of salaries, the ONS said. The wholesale, retail, accommodation and food industries are the heaviest users of wage support so far, accounting for over one-third of claims as of May 31.

While estimates compiled using HMRC data indicate overall pay growth has slowed substantially during the pandemic, starting to fall in April, the hit to Britain’s lowest paid will add to worries that the crisis is exacerbating inequality. Research by McKinsey found that almost a quarter of jobs are at risk due to the virus, with those earning low incomes most vulnerable.

©2020 Bloomberg L.P.

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