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The Actuary The magazine of the Institute & Faculty of Actuaries

One in five low-paid men now work part time in ‘dramatic’ income inequality rise

Earnings inequality among men has risen significantly in the last 20 years, with the hourly wages of high earners growing faster than middle earners, and more men now working part time on low pay, according to the Institute for Fiscal Studies (IFS).

Low hourly wages and low hours of work among men ©iStock
Low hourly wages and low hours of work among men ©iStock

Their Two decades of income inequality in Britain report, published today, reveals that one-in-five men aged 25 to 55 with low hourly wages now work part time, in comparison to one-in-20 in 1994-95.

In contrast, inequality in women’s weekly pay has fallen during this time, with a decrease in the proportion working part time, especially for those on low hourly wages, the opposite to the trend for men.

“The number of low-wage men working part time has increased sharply over the last 20 years,” IFS senior research economist and report co-author, Jonathan Cribb, said.

“To understand the drivers of inequality in the UK it is vital to understand the growing association between low hourly wages and low hours of work among men.”

The rise of part-time work among men on low hourly wages predates the last recession, with the trend occurring consistently over the last 20 years for single men and those in couples, whether they have children or not.

The proportion of men working part time by hourly pay is shown below:

Source: IFS
Source: IFS

The research also found that inequality in total net household incomes, including benefits and after taxes, across the vast majority of the population is actually lower than 20 years ago, however the top 1% have seen their share of this income increase from 6% in 1994-95 to 8% in 2014-15.

The proportion of income accruing to the top 1% since 1961 is:

Source: IFS
Source: IFS

Report co-author, Chris Belfield, said: “In the past 20 years, the incomes of the top 1% have pulled further away from the rest. But across the vast majority of the population income inequality has actually fallen.

“However, in large part this is because the tax and benefit system has worked increasingly hard to offset disparities in the pay brought home by working households, and because of the catch-up of pensioners with those of working age, as well as falls in worklessness.”