Earnings and Income

In ?, the median annual gross earnings of full-time workers resident in the district are £?. The median across the Leeds City Region is £?, and the England median is £?. Split by gender, median earnings for full-time work for men are £?, and for females are £?.

The earnings gap between Wakefield and England has narrowed slightly over the past few years for residents of Wakefield district, but for jobs at workplaces in the district the gap with the Leeds City Region and England has widened as local pay has risen more slowly (see graphs below).

Source: ONS Annual Survey of Hours and Earnings (nomis API)

The Gross Disposable Household Income (GDHI) statistics provide a more complete picture of income, as these consider a broad range of income types (including benefits and pensions) and also account for taxes and other social contributions. There was some growth in incomes even through the economic downturn, but most of the income growth that occurred in the last ten years has not been as a high as growth across the UK as a whole. This income gap has widened as a consequence, as it has for the Leeds City Region (see graph below). These estimates are produced at current prices, which means the effect of inflation has not been removed.

Effects of Inflation

Over the past decade, inflation (measured across the United Kingdom as a whole) has affected commodities and services to differing degrees. Clothing has actually fallen in price and the costs of recreation and culture have remained fairly static. The costs of transport and food rose markedly between 2006 and 2013, then remained fairly steady, but then increased again in 2017. The costs of education (mainly attributable to university tuition fees) have seen by far the largest increases and are continuing to climb. Within housing costs, inflation has been highest for electricity and gas. Council Tax inflation has been fairly low, held back since 2012 by a Government imposed 2% cap on annual increases. In the last couple of years, however, Council Tax bills have risen further to accommodate the adult social care precept.

State pension incomes have been protected against price inflation since the 1970s, although the mechanism for this protection has changed at times. The problem in last decade or so has been that annual increases in earnings from employment have not increased at the same pace as prices, so the value of those earnings has been diminished. The graph below shows the effect of inflation on full-time earnings of Wakefield District residents, and is very similar to the national trend. For those on median earnings, the value of their pay in real terms in 2017 is still less than it was in 2010, although the situation has improved in the last few years as wages have started to increase by greater amounts. The effect of inflation on people on lower earnings (lower quartile) has been less marked, and minimum wage and living wage policies have helped in this regard. Even so, while nominal earnings growth for lower earners was 44% between 2005 and 2017, the real increase in earnings, accounting for inflation, has only been 10% over this 12-year period.

Small-Area Income Estimates

Estimates of average income for 2013/14 were published by the Office for National Statistics on 16th December 2016. The geographic scale of the small areas is the MSOA (Middle Layer Super Output Area). In Wakefield, each MSOA contains around 3,300 dwellings, or 7,400 people.

Income includes gross earnings, self-employment, investments, pensions, benefits and tax credits. Net income is calculated as gross income minus the effects of income tax, NI, Council Tax, contributions to occupational pensions, child maintenance payments and parental contributions to students living away from home. Equivalisation adjusts the net income to account for household size, as a large income in a large household will not go as far as a comparable income in a single person household. All the income estimates are produced with confidence intervals, and these tend to be quite large. Statistically significant changes between consecutive data release periods tend to be rare as a result, and change over time comparisons are best made over longer time frames.

Across the district, the average gross weekly income in 2013/14 ranged from £540 in Featherstone and the Kinsley and Fitzwilliam area to £960 in Sandal. The gap is less marked when the effects of taxes, other outgoings and household size are accounted for, with the average equivalised net weekly income in 2013/14 ranging from £410 in the Kinsley and Fitzwilliam area to £660 in Sandal. Over the last nine years, the largest increases in average equivalised net weekly income have been in Glasshoughton; Ferry Fryston; Hemsworth; and Normanton areas. Despite this progress, the gap between the highest and lowest income areas hasn’t changed greatly.

The highest average incomes are found in places such as Sandal, Walton, Notton and Woolley, and also in the east of the district around Darrington and Ackworth (see map below). Parts of Stanley and Horbury also have higher average incomes. The lowest average incomes are found in places such as Lupset, Airedale and Ferry Fryston, Kinsley and Fitzwilliam, South Kirkby, the Chequerfield area of Pontefract and parts of Knottingley.

Average net weekly income (equivalised), 2013/14. Source: Office for National Statistics

There are a wide range of average incomes in MSOAs across the region. Hull has the lowest income profile, and Harrogate has the highest (see boxplots below). Leeds and Sheffield are both particularly diverse, with a wide range of incomes across their neighbourhoods. In Wakefield, Sandal stands out as a high income outlier among the district’s MSOAs, as does the Walton, Notton and Woolley area. All local authorities in the region have seen incomes increase between 2004/05 and 2013/14, but within districts the increases have not been even. Looking at the South and West Yorkshire metropolitan districts, Wakefield stands out as the only district where increases were greater for MSOAs at the bottom of the income scale than those at the top of the income scale. In Sheffield and Leeds the gap has widened considerably, with growth for MSOAs with higher average incomes increasing at a much faster rate those MSOAs with the lowest incomes.

Boxplots of MSOA average net weekly income (equivalised) across the region.