§ Dr. KumarTo ask the Chancellor of the Exchequer what estimate he has made of the number of people who will benefit financially in the first year from the introduction of a national minimum wage in(a) the Northern Region, (b) Teesside area and (c) the constituency of Middlesbrough, South and Cleveland, East. [72174]
§ Ms HewittThe information requested falls within the responsibility of the Director of the Office for National Statistics. I have asked him to reply.
421WLetter from Tim Holt to Dr. Ashok Kumar, dated 25 February 1999:
As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent parliamentary question on the number of people who will benefit from the introduction of the national minimum wage (NMW).The precise information you requested is unavailable. However, estimates of the proportion of people who are currently earning below the proposed NMW for (a) North East Region and (b) Teesside TEC area and (c) Middlesbrough South and East Cleveland Parliamentary Constituency are provided in the attached tables. It should be noted that the tables are based on the latest available information from the 1998 New Earnings Survey (NES) and the Labour Force Survey (LFS). It provides an historical position against 1998 values of the proposed NMW and makes no judgment on whether its introduction will have any effect on the number of jobs.The preferred method for assessing the coverage of the proposed NMW is to present adjusted NES and LFS data for the number of employees earning less than the proposed NMW rates. This method adjusts for the fact that the NES is based on a one per cent sample of employees in the PAYE system and is therefore likely to under-represent relatively low paid staff earning below the tax threshold, in particular those who work part-time. It is not possible to use this method for small areas, and information solely from the NES, has therefore been provided for Teesside and Middlesbrough South and East Cleveland.The extent of the bias in the NES data may be estimated for the North East by using the adjusted NES and LFS data for all employees. This suggests that the estimate of the overall proportion of full-time employees aged over 21 years earning below £3.50 could understate the true position by as much as 5 percentage points. However, it is unlikely that the occurrence of lower paid jobs is uniform across the region, and so it would be wise to treat this figure as broadly indicative rather than as a precise estimate. I am unable to provide the bias for employees aged 18 to 21 years because the sample size is too small for a reliable estimate to be produced.
Employees, whose pay for the survey period was unaffected by absence Hourly pay excluding overtime and shift pay (£) Percentage aged 18 to 21 on all rates earning less than £2.90 Percentage aged 22 and over on adult rates earning less than £3.50 Teesside TEC area 9.4 7.5 Middlesbrough South and East Cleveland 1— 1— 1Denotes that a reliable estimate is not available Source:
New Earnings Survey, April 1998
Number and percentage of employees aged 18 to 21 earning less than £2.90 per hour; Adjusted estimates
North East: a reliable estimate is not available.
422W
Number and percentage of employees aged 22 and over earning below £3.50 per hour; Adjusted estimates; Spring 1998 North East Lower Range Percentage 10.2 Number (Thousand) 89 Central Estimate Percentage 11.1 Number (Thousand) 97
Number and percentage of employees aged 22 and over earning below £3.50 per hour; Adjusted estimates; Spring 1998 North East Upper Range Percentage 12.0 Number (Thousand) 105 Sources:
New Earnings Survey, 1998 and Labour Force Survey (Spring 1998).
The adjusted estimates are produced in line with an article "Towards reconciliation of NES and LFS Earnings Data" by David Wilkinson in Labour Market Trends; May 1998 pp223–231.