Weak incomes and gender pay gap holding back Welsh workers: Labour Market Update

Gender and age remain key factors when it comes to explaining wage levels in Wales, according to a new report from Cardiff University’s Wales Governance Centre.

The Labour Market Update for Wales is the latest report from the Wales Fiscal Analysis team, and reveals a series of stark findings on work, wages and economic activity in Wales.

The analysis shows that younger men and women’s median taxable incomes are similar, just above the personal allowance of £12,570 – but that the gender pay gap then grows and peaks among 45-54-year-olds, where women earn a median income of £18,000, compared to £23,600 for men. The data show that women’s wages vary comparatively little over their lifetime, while men’s incomes increase considerably as they age.

The overall size of the gender pay gap has narrowed over time, but remains present, and is at its widest for lowest-paid workers.

Overall wages remain weak in Wales. Since the data began in 2000/2001, no significant sustained trend can be seen in terms of growing the number of Welsh workers on middle and higher incomes, or on significantly reducing the proportion of men or women earning lower wages.

Other key findings include a revelation of the most highly-paid sectors in the economy, with HMRC data showing that workers in the mining and quarrying, energy, and water industries are the best paid in Wales.

Meanwhile, data limitations continue to pose problems for any further analysis of incomes for ethnic minority communities by sector, gender, or age group.

The report urges governments to take the distinct make-up of the Welsh labour market into account when navigating the “tough economic headwinds”.

“It is a stark picture and a complex one,” says lead author Dr. Larissa Peixoto Gomes.

“We used several sources in order to build up this picture, and it is one of systemic inequality, where many women are working and studying part-time while taking care of the home. Even with the decrease in the gender pay gap, this remains the reality for most. It is particularly difficult to try and get more detail about this regarding ethnicity, country of origin, and even local authority, because the data is so poor. We need better data to produce quality information.”