Background to the Research

• This study was stimulated by two main factors: the new Labour Government's review of the tax/benefit system; and the possibility of changes to the National Insurance system and long standing equality issues surrounding the latter. The report examines how many people in NI are in work, but earning less than the weekly lower earnings limit (LEL). The LEL is the threshold below which National Insurance contributions are not paid and therefore, entitlement to a number of contributory benefits is effectively denied or severely restricted.

Research Approach

• The analysis is based on the Labour Force Survey over the period 1993-1996 and examines the characteristics of male and female employees whose earnings are below the LEL. In addition, the report includes comparisons of those earnings less than the LEL in NI with their counterparts in GB.

Main Findings

• One in eight (12%) of employees both in NI and 11% in GB earned less than the LEL during the 1993-96 period. There are marked age and sex differences within this group. Two thirds (65%) of young (16-18) men and 72% of young women earned less than the LEL in NI, while only 3% of adult men of working age did so. One in six (17%) adult women employees earned less than the LEL.
  
• In both NI and GB, the majority of men earning less than the LEL are young men (53% and 62% respectively), but proportionately more such men in NI are less likely to be adults. In both countries, however, adult men who are fathers or living in a couple are highly unlikely to be earning less than the LEL. Adult women earning less than the LEL are more likely to be mothers than women earning above the LEL - a fifth (22%) of mothers of dependent children earn less than the LEL compared with one in eight (12%) of other women. Women earning less than the LEL are slightly more likely to be living in a couple than other women (72% as 69%).
  
• Women employees are over-represented among those earning less than the LEL in both female-dominated and male-dominated occupations and industrial sectors. Three occupational groups - personal and protective, sales and other occupations - and three industrial sectors - distribution, hotels and restaurants, public administration, education and health and other services - account for most employees earning less than the LEL. The main difference between GB and NI lies in the occupation of men earning less than the LEL - 22% of men aged 19-64 earning less than the LEL are in the the Craft and related Group in NI compared with 11% in GB, while 21% of adult men earning less than the LEL in GB are in 'other services' compared with 12% in NI. Similar patterns hold among young men.
  
• Young men and women earning less than the LEL in NI do not differ from those earning above the LEL in terms of qualifications. However, among adults, having no qualifications is associated with earning less than the LEL among both sexes, but to a larger extent among women than men.
  
• Although similar proportions of employees in Britain and NI earn less than the LEL, hourly pay rates are significantly lower in NI as a whole and within the sub-group of those earning less than the LEL. This is particularly so among men earning less than the LEL, although some difference may be attributable to the higher proportion of Northern Irish men on government training and employment programmes. The result of lower hourly wages is that people in NI earning less than the LEL work longer hours to do so. Even among women aged 19-59 years, where the pay gap between GB and NI is smallest, 34% of Northern Irish women earning less than the LEL work for 16 or more hours a week compared with 21% of their GB counterparts.
  
• Half (51%) of women earning less than the LEL in NI receive Child Benefit, and thus have some protection of their National Insurance record, but so do 41% of those earning above the LEL. In terms of population, by applying the proportion of those who earn less than the LEL, as found in the Labour Force Survey (93-96) among female employees aged 19-59 (17%), to the total population of female employees in 1996, about 49,000 female employees in NI earn less than the LEL, of whom about 24,000 are probably not even receiving Child Benefit.