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The percentage of workers who are employed part-time (20 per cent) is the lowest of all UK regions, and is four percentage points below the UK average (24 per cent) (Table 3.2). Despite this, men in London actually are more likely to work part-time than the national average (11 per cent compared with 10 per cent respectively). It is among women that the London part-time rate falls considerably below the UK average. Only 31 per cent of women in work are in part-time employment in London compared with 41 per cent in the UK as a whole. In Inner London this figure is even lower at just 25 per cent.
Amongst women in London, the most common reason given for working part-time is that they did not want a full-time job (73 per cent) followed by that they were a student or at school (16 per cent). For men, 41 per cent said they did not want a full-time job, but this was well below the UK average (50 per cent). However, 26 per cent gave “they could not find a full-time job” as the reason for working part-time, 10 percentage points more than the UK average (Figure 3.3).
The self-employment rate in London is the highest of any UK region. The London rate of 16 per cent is 3 percentage points above the UK average. Men are considerably more likely to be self-employed than women, with over a fifth of all men in work in London being self-employed compared with less than half that proportion for women. Only Northern Ireland has a higher proportion of men in self-employment, though London is top for women.
Employment by occupation
London has a distinct occupational profile from the rest of Great Britain. Londoners are more likely to be in managerial and professional occupations. More than half (54 per cent) of all those in employment in London work in professional, managerial or technical occupations compared with just 42 per cent outside the capital (Figure 3.4).
Conversely, only 20 per cent of London residents in work are employed in Sales and Customer Service, Process, Plant or Elementary occupations compared with 27 per cent in the rest of GB. There is also a higher proportion of Skilled trades employment outside the capital.
Table 3.5 shows that since 2001 the percentage of people employed in managerial or professional occupations has increased by 2.5 percentage points in London (179 thousand jobs), in line with national trends. The proportion of people in Administrative and Secretarial jobs has decreased by 3.0 percentage points. To put that in context, despite there being around 272 thousand more Londoners in work in 2007, there were 69 thousand fewer people in this occupational group. Although there was also a drop in this occupational group outside London, it was much smaller (1.6 percentage points).
There were 41 thousand more people in Skilled trades between 2001 and 2007, an increase in share of 0.6 percentage points, which is in stark contrast to the national picture, where there was a drop of 1.1 percentage points (66 thousand jobs).
The Process, Plant and Machine operative category in London is another group that bucks the national trend. There were 11 thousand more of these jobs in London in 2007, but outside London there were 189 thousand fewer employees in this group - a drop in share of 1.3 percentage points.
Employment rates by London borough
Within London, there is considerable variation in employment rates at borough level. Rates range from 82 per cent in Bromley down to 57 per cent in Tower Hamlets (Figure 3.6). In London’s neighbouring regions, the South East and the East of England, rates are generally higher and a little less polarised (Table 3.18).
For London, women’s rates are even more polarised across boroughs from 76 per cent in Bromley down to 43 per cent in Tower Hamlets: a gap of 34 percentage points. For men rates range from 86 per cent in Bromley down to 67 per cent in Hackney: a gap of 19 percentage points.
Within London, the three boroughs with the lowest employment rates are: Tower Hamlets (57 per cent), Newham (58 per cent) and Hackney (63 per cent). Tower Hamlets and Newham have the lowest employment rates in Great Britain and Hackney is ranked fourth lowest. (Table 3.19).
Trends in employment rates
Over the last decade employment rates in London have varied between 69 and 71 per cent, though overall between 1997 and 2007 there has only been a slight increase of 0.4 percentage points. The changes in London are so small, that it is impossible to know how much of the change is real and how much is down to sampling error. The confidence interval on the 2007 London employment rate is +/- 0.7. Over the same period in the rest of Great Britain, rates have stabilised since 2000 at 75 per cent, an increase of around 2 percentage points since 1997.
The rates for men in London have slowly increased from 75 per cent in 1997 to 78 per cent in 2008. The gap between the London rate and UK was around three percentage points in 1997 and again between 2003 and 2005 but has since dropped to just one point, and the recent trend shows the gap narrowing to the GB average.
For women, the employment rates in London have fallen slowly since 1999 when they were 66 per cent down to 63 per cent between 2003 and 2007. This is in contrast to the picture in the UK where rates have steadily increased from 68 in 1997 to 70 in 2008. The gap between London and UK rates has doubled from three percentage points in 1999 to six points in 2008 (Figure 3.7).
Labour force projections
GLA projections studies shows the labour force of London, that is those people who are economically active, is projected to grow by 11 per cent between 2006 and 2016, an increase of 408 thousand people. The resident labour force of Inner London is set to grow at a far faster rate than Outer London (14 per cent and 8 per cent respectively). The biggest growth rates at a borough level are projected to be in Newham (37 per cent), Tower Hamlets (29 per cent) and Barking and Dagenham (26 per cent) (Table 3.21). For more on population projections refer to Chapter 1.
Employment rates by gender and age
Employment rates vary significantly for different groups within the population. Working-age women have a lower employment rate (63 per cent) than men (77 per cent). The gender gap in rates is mainly due to the lower employment rate of women with children, as rates for men and women without children are similar. This is consistent with the fact that the gender gap in rates is widest for the age groups 25-49, the age where women are most likely to care for children. Across all age groups, employment rates are lowest for young people, aged 16-24 (47 per cent), consistent with the high proportions of students in this group, the majority of whom do not work (Table 3.20).
While employment rates begin to decline as people approach pensionable age, many people work beyond standard retirement age. Around one in eight (13 per cent) of all Londoners of pensionable age and over are in employment. This group comprise four per cent of all those in employment.
Employment rates by parenthood
The employment rate for men in London who are not parents is 79 per cent, which is higher than the proportion in the rest of the UK (77 per cent). Among women who do not have children, the rate is the same as that outside London at 77 per cent. Nationally at least, the employment rate of men and women without dependent children is the same.
In couple families, the employment rate of fathers with dependent children (89 per cent) is 10 percentage points higher than that of those without dependent children. However, this is not as much as the difference observed in the rest of the UK where the gap between the two rates is 15 percentage points.
While the employment rates for fathers in couples are higher than for men without children, the rates for mothers in couples in London are 19 percentage points lower than for women without children (58 per cent). This is in sharp contrast to the rest of the UK where rates for couple mothers are still relatively high at 74 per cent – only three percentage points lower than for women without children. This makes the London rate 16 percentage points lower than that outside London.
Rates for lone mothers in London are lower still at 42 per cent, which is considerably lower than outside London where the employment rate of 57 per cent is 15 percentage points higher (Figure 3.8). The rate for lone fathers is lower still, though numbers of lone fathers are far lower and consequently the low sample size means confidence intervals for this group are relatively high for London.
If women in London had the same employment rates as for women outside London, an additional 102 thousand couple mothers and 42 thousand lone mothers would be in employment. This is partially offset by the 36 thousand men and women in work in London who are not parents, due to the slightly higher employment rates compared with rates outside London.
Employment rates by disability
Disabled Londoners comprise 15 per cent of London’s working-age population. Of this group, almost two-thirds (62 per cent) are disabled according to both commonly used definitions (ie DDA only and work-limiting only definitions) – nine per cent of the working-age population. The remaining six per cent are disabled according to one disability definition only, split approximately evenly between the two (see Notes and Definitions).
The employment rate for working-age disabled Londoners is very low (45 per cent) relative to the rate for non-disabled Londoners (74 per cent). Within the disabled population, those who are disabled according to both DDA and work-limiting definitions of disability have the lowest employment rate (31 per cent) (Table 3.20).
Those who are disabled according to the DDA definition but not according to the work limiting definition have much higher employment rates (73 per cent), the same as the rate for the non-disabled population. Those who are disabled according to the work-limiting definition but not according to the DDA definition have an employment rate of 60 per cent.
The gap in rates between disabled and non-disabled men is 35 percentage points relative to 23 percentage points for disabled and non-disabled women.
In terms of the composition of the working-age population, disabled Londoners comprise 15 per cent of the overall population, 10 per cent of the employed population and 27 per cent of the workless population.
Employment rates by ethnicity
The employment rate for Londoners from Black, Asian and minority ethnic (BAME) groups is 60 per cent, far lower than the rate for White Londoners (75 per cent). Within the BAME population, rates are lowest for those from Bangladeshi/Pakistani groups (45 per cent) and highest for the Indian population (71 per cent), whose employment rate is around the London average (Table 3.20).
The employment rate is very low among BAME women (52 per cent), especially those of Bangladeshi/Pakistani origin (26 per cent).
In terms of the composition of the working-age population, BAME Londoners comprise 36 per cent of the overall population, 31 per cent of the employed population and 47 per cent of the workless population.
Employment rates by ethnicity, country of birth and nationality
Londoners who were born outside the UK tend to have lower employment rates (66 per cent) than UK-born Londoners (73 per cent). However, the employment rate for BAME migrant Londoners is far lower (60 per cent) relative to the rate for White migrants (74 per cent).
The employment rate for UK nationals is slightly higher than average at 71 per cent, and around six percentage points higher than the rate for non-UK nationals (65 per cent). However, analysis by nationality, reveals enormous dispersion of employment rates ranging from 21 per cent for Somalians up to 91 per cent for Australians. Londoners with Turkish, Bangladeshi or Pakistani nationalities have low employment rates - between 30 and 42 per cent. Figure 3.9 shows employment rates for London’s 20 largest populations by nationality.
The differences between employment rates for migrants by country of origin compared with rates by nationality are usually very small. However, migrants from Bangladesh (47 per cent) have a much higher employment rate than people with Bangladeshi nationality (34 per cent).
Unemployment rates by region
In 2007 the unemployment rate in London was around seven per cent - the highest rate of all UK regions. Rates average 8.5 per cent across Inner London and 5.8 per cent in Outer London. Unemployment rates are relatively high for young people aged 16-24 (18 per cent), disabled people (13 per cent) and BAME Londoners (11 per cent). The rate is the same for both men and women (seven per cent).
Unemployment rates for London Boroughs: New modelled estimates
Within London, unemployment rates range from 12 per cent in Tower Hamlets down to four per cent in Richmond upon Thames, a gap of eight percentage points. Tower Hamlets has the highest unemployment rate of all local authorities across Great Britain, followed by Hackney and Newham (both 11 per cent) (Map 3.10).
Data from the Annual Survey of Hours and Earnings shows that the median gross weekly earnings in 2008 for Londoners was £503, 30 per cent more than the UK median. Median earnings are used for the average rather than mean because a small number of very high earners will skew the results. On average Londoners earn more than people from any other UK region – 18 per cent more than the second ranked region, the South East, and 45 per cent more than the lowest ranked region, the North East (Table 3.11).
Men living in London earned on average 34 per cent more each week than women, though some of this differential is because more women work part-time. When the figures are broken down into full-time and part-time work, men in full-time work earned 18 per cent more than women. Conversely women in part-time work earned 12 per cent more than men, and the same difference can be observed for hourly pay suggesting men and women part-time workers in London work roughly the same number of hours per week. The difference here may be down to highly skilled women returning to work to relatively high paid jobs, but with reduced hours, having previously looked after a family. Nationally the pay gender gap is much larger than seen in London, where men earned 62 per cent more than women, and men in full-time work earned 27 per cent more than women.
When earnings are analysed for people who work in London rather than people who live in London, earnings in London are seven per cent higher at £538, though it makes more of a difference for men compared with women (nine and four per cent higher respectively). Workplace earnings for full-time employees are higher than the national average for men and women (30 and 32 per cent respectively) (Table 3.12). Workplace earnings are higher than resident earnings in London because in general commuters who live outside London are paid more than the average, because they are prepared to travel further for higher wages.
Earnings by occupation
In the workplace analysis, Managers and Senior Officials have the highest earnings in London (£862 per week), 60 per cent more than the London average. Full-time male managers earn 37 per cent more than women in the same occupation group – the largest gap between the genders – only slightly bigger than between men and women in full-time elementary occupations (34 per cent). The gender gap is slightly smaller in professional occupations where the difference is 17 per cent. Men and women employed full-time in both Administrative and Secretarial Occupations and Sales and Customer Service Occupations are paid around the same on average. People employed in Sales and Customer Service Occupations earn the least of any group (£210 per week) (Table 3.16).
Trends in full-time earnings
In 2008, men working in London in full-time employment earned £677 on average, 25 per cent more than women. The gender gap was far larger in the past. In 1966, men earned 91 per cent more, but by the mid-seventies this figure had fallen considerably to around 50 per cent. The gap continued to narrow steadily until the early nineties when it stabilised and has fluctuated between 23 and 29 per cent ever since.
Nationally the gender gap has followed a similar pattern to that of London but has been a few years behind, probably because the gap started off a bit bigger than in London, but in the last few years has come in line with London and now stands at 27 per cent (Figure 3.13).
In 1966 the median full-time weekly wage for a man working in London was £23.20. The 2008 figure is almost 30 times higher, and the most recent male earnings are around £28.00 per week more than in 2007. While this is a much bigger increase than say between 1966 and 1967 when earnings increased by £1.30 per week, proportionally earnings growth was far greater between the sixties and the eighties than it has been in the last two decades. For example, annual growth in male earnings was seven per cent in 1968, which increased significantly to 15 per cent in 1973 and remained high throughout that decade and into the early eighties. Growth then fell a little in 1983 to eight per cent and in 1988 was nine per cent – both figures were lower than the increase for women (Figure 3.14). When taken as a whole decade, average growth in the seventies was 14 per cent, which fell slightly in the eighties to 11 per cent. Throughout the nineties and since the millennium earnings growth has been lower. Growth in the nineties averaged five per cent and since then has been four per cent per annum on average.
It is important over this length of time to consider overall price inflation in order to gauge real earnings growth. Despite a very high rate of inflation during much of the seventies and early eighties, overall earnings growth has been significantly higher than inflation, running on average over 2 per cent per year higher than inflation since 1966.
The gap between earnings in London and the UK has increased steadily over the last 40 years. In the 1960’s the difference was nine per cent, during the 1970s, this had doubled to 18 per cent, and increased further in the 1980s to 24 per cent. The gap currently stands at 29 per cent.
Interestingly, earnings for women in London have overtaken earnings for men in Great Britain. In 1966 women in London earned 57 per cent of what the average man in Great Britain earned, but very steadily the gap was eroded and in 2001, women in London overtook the national male average. Women Londoners currently earn four per cent more than the British male average (Figure 3.15).
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