There are several ways of trying to establish ’average’ pay rates in an industry or area. You can ask employers what they pay their staff or you can ask employees what they receive. Or you can do what we’ve been doing every year since 1998 examine the payroll data that PAYEPeople process on behalf of hundreds of forecourt operators across the UK and work out the real hourly pay rates that were being paid to thousands of individual employees.
For the sake of consistency, we perform the calculations using source data from the same month each year September and capture a ’freeze-frame’ of what each hourly-paid employee received as his or her hourly rate during that month. The data is then split by geographic region and we work out the national and regional average pay rates, and compare them to earlier results.
Let’s start with a reminder of how things looked last time around, in September 2011:
UK national average forecourt pay rate was £6.22 per hour.
Retail Prices Index (RPI September 2011) was 237.9.
Adult minimum wage rate was £5.93 per hour (18-20 age rate was £4.92 per hour).
And this is how they were in September of this year:
UK national average forecourt pay rate in September 2012 was £6.29 per hour.
RPI (September 2012) was 244.2.
Adult minimum wage rate was £6.08 per hour (18-20 age rate was £4.98 per hour).
So, over the course of those 12 months, the changes amounted to:
Average forecourt pay increased by 1.1%.
Price inflation increased 2.7%.
Statutory minimum wage rate (over-21s only) increased by 2.5%.
Those are the overall results. The last time we published this report we said about the regional results: "We just don’t see the wide variations that we used to get in the early days" which, with hindsight, seems to have been tempting fate somewhat, since there’s been quite some movement between the regions this year:
South West England: £6.48/hr up from £6.08 (+ 6.5% change). This had been the number one paying region for a couple of years, ending in 2009 and then had fallen quite dramatically, being bottom of the league last year. This year it was back to the top, and also had the highest individual-site average rate.
Midlands: £6.37/hr down from £6.63 (-3.9%) last year. Although it retainined joint second place in terms of regional averages, and still had the second-highest individual-site rate (£6.95), this was one of four regions to show a fall in average rates from last year.
South East England: £6.37/hr up from £6.23 (+2.3%). Joint second in terms of regional averages this year (although its highest individual-site rate was £6.82), this is another region that has crept back up the pay league after several years in the lower half.
Eastern England: £6.29/hr up from £6.25 (+0.6%). It stayed in fourth place and is now squarely in line with the UK national average.
Greater London: £6.28/hr up from £6.12 (+2.6%). Up to fifth place nationally, but still below the high placing that was ’normal’ for this region a decade ago.
Northern Ireland: £6.27/hr up from £6.10 (+2.8%). Another above-average increase sees this region rise from ninth-place last year to sixth-equal in 2012.
North West England: £6.27/hr down from £6.29 (-0.3%). Another region where average rates have fallen over the past 12 months. The actual decrease was quite small, but the changes elsewhere have seen it drop from second place in the pay league last year to joint-sixth in 2012.
North of England: £6.22/hr down from £6.28 (-0.9%). Rather like the North-West, a drop in average rates here coupled with changes elsewhere, have sent this region to eighth place in 2012. Interestingly, while this is quite a large geographic area, it has the narrowest ’spread’ of rates in our database
Wales: £6.15/hr up from £6.12 (+0.5%). Dropped one place from last year.
Scotland: £6.14/hr down from £6.17 (-0.4%). Historically one of the lowest-paying regions, and after a couple of years of above-average rises, the fall in hourly rates this year has placed it back at the bottom of the pay league in 2012.
At this point, some readers may be wondering how pay rates could have ’fallen’ over the past year in four regions out of 10.
Have higher-paying employers been forced out of business? Have employers reduced pay rates across the board? Both are possible answers, although rather unlikely.
The most plausible answer, on the basis that the overwhelming majority of individual employers have remained the same between 2011 and 2012, is that there has been a change in the age and/or skill mix of the staff employed.Older, probably more experienced staff, have left and been replaced by less experienced people or trainees at correspondingly lower rates of hourly pay.
As they were a year ago, forecourt pay increases are still lagging behind retail price inflation and, in common with much of the UK pay rates are considerably below the long-term trends that were established during the ’boom years’ of the ’90s and early ’00s.
There was a time when it was easy to predict rates a year ahead by trend analysis, but the real figures have been considerably below the predictions for several years now. For example, 12 months ago the long-term trend analysis predicted an increase in the UK national average rate to £6.47 for 2012, although we hedged our bets by suggesting the increase might be no more than 2%, which would have given a current rate of £6.35.
So while the long-term trend implies a figure of £6.62 for next year (!) we’ll stick to predicting something between £6.40 and £6.45 as being more realistic!
Finally, special thanks to Craig Anderson at PAYEPeople for extracting the data without which these reports wouldn’t be possible.