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Pay for men 'no higher than it was in 2000'

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The pay of typical male workers in Greater Manchester is no higher than it was seventeen years ago, according to new research published by the Resolution Foundation think tank.

The region has experienced one of the worst post-financial crisis pay squeezes of any metro area. This has particularly affected male employees, with typical pay for men in Greater Manchester reaching £13.80 an hour before the crisis but now standing at only £12.40. This fall of 10 per cent (compared to 6 per cent across the UK as whole) leaves typical pay for men in Greater Manchester back at the same level it was at the turn of the millennium.

Falls in the share of men in skilled trades and manufacturing roles have weighed on male pay, although there are also now a greater share of men working in professional and managerial roles than at the turn of the millennium. While pay for men right across most of the earnings distribution has been squeezed, the introduction of the National Living Wage (NLW) has shielded low-paid workers and particularly benefitted women. Female pay has been boosted by the fact that there are far more women in professional and managerial positions than there were at the turn of the millennium.

In contrast to pay, the overall picture of employment in the area is positive, the analysis finds. Employment has grown strongly in the Greater Manchester area since 2013, surpassing its pre-recession level to hit 71 per this year.

But London has performed even better, despite entering the crisis with lower levels of employment. The capital’s employment rate is currently 75 per cent, having begun its post-crash recovery almost three years prior to Greater Manchester, highlighting the potential for further gains.

Though the overall employment growth is strong and builds on the major economic success of Greater Manchester during the 2000s, in relative terms the city’s performance on employment since the recession has been lacking. London has risen up the rankings to be the third best performing city on employment in 2017 for 16-64 year-olds up from the ninth in 2005, by contrast Greater Manchester has slipped from fourth to fifth.

Looking beneath the lid at the types of employment, there has also been an increase in ‘atypical’ work. The numbers of agency workers, those on zero-hours contracts and the self-employed has risen far faster in Greater Manchester than the increase in full time workers since 2009.

There are now over 30,000 people on zero-hours contracts (ZHCs) living in Greater Manchester, four times that in the beginning of 2013 when numbers began to rise sharply. Partly this represents greater awareness but numbers continued to rise until recently, even after the publicity surrounding ZHCs stimulated interest in these contracts. Though some workers value the flexibility these contracts provide, research shows they also see a pay penalty of 93p less an hour than similar workers with regular hours of work.

Greater Manchester also has more self-employment than many of the other city regions, with 15 per cent of workers currently self-employed. Only Leeds, Bristol and London have a higher proportion. Over time the proportion of self-employed technicians, professionals and managers has grown, but people in lower-paying roles still account for the majority of the self-employed. With a rise in the number of agency workers leaving them more prevalent in Greater Manchester than the UK as a whole, local solutions will be required if the region wishes to become an example of best practise in creating well paid, good quality, secure jobs.

As a result of the growth of lower-paid roles and the rising generosity of the NLW, the Foundation warns that the challenge of ensuring workers are still incentivised to progress up the ladder is becoming even more pressing. With the share of people on the minimum wage in Greater Manchester doubling by 2020, it is incumbent on employers to provide pathways and incentives for people to progress, or risk having their workers poached by better-paying rivals.

Stephen Clarke, Research and Policy Analyst at the Resolution Foundation, said:

The men of Greater Manchester have suffered from a pay rise drought since the turn of the Millennium, posing a huge challenge to anyone concerned about living standards in the city.

While the National Living Wage has been a resounding success in helping the region’s lowest paid (the majority of whom are women) boost their pay packets without leading to mass redundancies as some warned, there is much still to do.

The new Mayor should aim to build on the generally strong employment growth Greater Manchester has seen since the recession by helping businesses create good quality jobs, while tackling the rise in atypical employment that can often mean unstable and badly paid work.

We therefore welcome Mayor Andy Burnham’s plan to introduce a charter for good employment in Greater Manchester. By bringing together businesses and workers to create a more productive city region that provides good quality, well-paying jobs to its workers, Greater Manchester has the potential to become a Northern employment powerhouse.

– Stephen Clarke