Cornwall’s Average Wage

It will be of no surprise that the average wage in Cornwall is much less than the national average. Figures recently released* show the reality of how far behind Cornwall is against the national average. Taking the average wage in Cornwall in isolation on its own is bad enough, but if you add in the average house price and /or the average rent and then add in the other costs of living, it paints a bleak picture for Cornwall.

The latest earnings figures from the Annual Survey of Hours and Earnings show that the average annual workplace gross earnings of an employee in Cornwall were £17,344 in 2014, up by only 0.1%. If you expressed this as a percentage of the UK average, this represents 79% of that average. Compared to other Unitaries, Counties and London Boroughs in the UK, Cornwall ranked 196th out of 200. This is depressing.

The annual earnings in Cornwall split into gender is:

  • Earnings for males averaged £21,085, 78% of the UK average.  Up by 3.8% on 2013.
  • Earnings for females averaged £14,102, 82% of the UK average.  Down by 0.4% on 2013.
  • Full-time workers averaged £22,012, 81% of the UK total, part-time workers £8,633, 96% of the UK total.

The weekly and hourly wage in Cornwall:

  • Average weekly earnings totalled £320.9, 77% of the UK average, full-time £425.7 and part-time £150.4.
  • Average hourly earnings totalled £9.11, 79% of the UK average.

The data for Cornwall is available at the Parliamentary Constituency level. Here, Truro and Falmouth had the highest annual workplace earnings at £19,165 with South East Cornwall the lowest £15,304. Resident annual earnings equalled £18,354, 83% of the UK average. Lowest earnings were in St. Ives at £16,663 (76%) and highest in South East Cornwall at £20,812 (94%). The reason for the residential annual earning are different  because this included those people  who commute out of the Duchy. This is particularly the case in South East Cornwall.

Average Wage by Parliamentary Constituency

Average Wage by Parliamentary Constituency

The work place earning for the Parliamentary Constituencies are:

Cornwall: £17, 344 – 0.9%

  • Camborne and Redruth: £18,089 – 0.8% change from 2013
  • North Cornwall: £18,093 – 0.1% change from 2013
  • South East Cornwall: £15,304 – 6.6 change from 2013
  • St Austell and Newquay: £15,458 – minus 13.1 change from 2013
  • St Ives: £16,359 – 1.1% change from 2013
  • Truro and Falmouth: £19,165 – 6.6% change from 2013

United Kingdom: £22,0440.9% change from 2013; England: £22,343 – 0.8 % change from 2013

The Place of Resident earning are:

Cornwall: £18,354 – 0.4% change from 2013

  • Camborne and Redruth: £18,018 – minus 0.6 change from 2013
  • North Cornwall: £20,003 – 13.9% change from 2013
  • South East Cornwall: £20,812 – 7.4 change from 2013
  • St Austell and Newquay: £17,386  – minus 6.8% change from 2013
  • St Ives: £16,663 – 1.2% change from 2013
  • Truro and Falmouth: £20,163 – 4.5% change from 2013

United Kingdom: £22,044 – 0.9% change from 2013; England£22,343 – 0.8 change from 2013

It is no surprise the further West you go in Cornwall there is not a great deal of difference between the work place earnings and the place of resident earnings. However, In the East, there is a difference because people have the opportunity of working out of Cornwall like in Devon. Though, the wages in the East are clearly the lowest in the whole of Cornwall if you take the work place earnings in isolation.

Because of the scale of the difference between the national average and Cornwall, there will have to be a fundamental change on how people are paid in Cornwall. The Living Wage is one solution, but this could place pressure on small businesses who might take on less staff to off-set the extra costs of the Living Wage. Or prices of goods and services will have to increase to cover the costs of the Living Wage. Sadly, there is no simple solution, but one must still be found.

 

 

*Source: Office for National Statistics, Annual Survey of Hours and Earnings, 2014 Provisional Results, 19 November 2014 [All figures are gross and give the median figure not the mean as the former is deemed to more accurately represent the average earnings in an area]. Thanks also to the Community Intelligence Team at Cornwall Council

 

                             

Cornwall, the Council and the Living Wage

Both nationally and locally in Cornwall there has been a lot of talk on the Living Wage. This is a wage rate set by The Centre for Social Policy at Loughborough University to ensure a basic by acceptable standard of living. It is currently set at £8.55 in London and £7.45 for the rest of the UK. This would pay someone working a 37 hour week a gross annual income of approximately £14,372.

The Living Wage is increasingly seen as an important policy tool in addressing the issue of low pay. In local government of over 400 councils in England and Wales, 82 are already paying or have committed to pay their employees the Living Wage. In addition all 32 councils in Scotland pay their employees the Living Wage. The question for the Council, is should Cornwall Council be a Living Wage employer? The short answer is yes; with the long answer more complex, as introducing the Living Wage will have an impact on other areas within the Council.

Currently, approximately 25% of the Council’s workforce is paid less than the Living Wage, the majority in schools. Or to put it more positively 75% are paid the Living Wage. I will give greater detail later.

First let’s look at Cornwall’s average earnings. This has increased from a little over £13,000 a year in 2004 to just over £17,000 in 2012. However, it would be a mistake to think that the whole of the Cornwall economy is low waged. Estimated analysis of 2010 Eurostat indicators show a wide divergence of average earnings linked to sector: from around £5800 p.a in ‘legal and accounting activities’ to £97,000 p.a in ‘scientific research and development’. Note that Eurostat data does not include Public Sector pay.

The Council has a good understanding of these pressures on individuals although they will inevitably vary in terms of household formation and pressures. Analysis by the Council’s Community Intelligence team indicates that average (band D) Council Tax costs, together with mortgage housing and utilities would require an annual income of £18,141 (not including food and clothing).

If we look at the wider Cornish Community, the figures on wages are far more worrying, as 20% of full-time resident workers earn less than £7.53 per hour (gross) and for part-time workers this is nearer 50%. This has an impact on welfare claims as 14.9% of the working age population in Cornwall receives DWP administered benefits (a ballpark cost of around £4m with Cornwall accounting for c1% of the national population) and 26.1% of households claim council tax or housing benefits (2012).

Getting back to Cornwall Council and the Living Wage; the council has 3131 contracts on the Council’s main pay structure paid less than the Living Wage. 2866 of these contracts are in Cornwall Council maintained schools (where the Council is the employer and has equal pay responsibilities). 265 of the contracts are non schools. 3131 represents approximately 25% of the work force. For me, as the Portfolio Holder for Children and Young People it is worrying that my portfolio is one of the biggest non-payers of the Living Wage. If there was a Living Wage the increase would have to be found from the Dedicated Schools Grant (DSG). However, I will be asking senior officers as to what can realistically be done to address the issue of low pay.

If Cornwall Council did decide to introduce the Living Wage, it would cost the Council £1.04m per year. This extra money would have to be found either by reductions in services, staffing levels or by Council Tax. Roughly raising Council Tax by 1% results in an extra £2m. The Government has capped Council Tax increases by 2% before a referendum is required. And as we all know, the Council is under extreme pressure with its budget with having to find £196m in saving in the next five years. So by introducing the Living Wage at the Council, it could have a far greater impact on the services the Council provides.

I will leave you with a question. If Cornwall Council were to introduce the Living Wage, should the Council insist that all contract with outside organisation and providers pay the Living Wage too? Note, that the RCHT not intending to implement the living wage and there has been no consultation with industry leaders in Cornwall.

*credit to Dawn and her team for much of the detailed information.