Background to the Research
- This report examines how
many people in NI are in work but earning less than the weekly LEL.
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. The study has been stimulated
by two factors:
- The new Labour Government's
review of the tax/benefit system and the possibility of changes
to the national insurance system;
- Long standing equality
issues surrounding the national insurance system.
- Very little information
has been known about employees earning below the weekly threshold for
payment of national insurance contributions. The main source of information
on earnings - the New Earnings Survey - does not include these employees.
The LEL threshold currently stands at £64 (1998-1999). As in the rest
of the UK, the vast majority of employees earning less than the LEL
in NI are women.
Research Approach
- The analysis reported here is based on
the Labour Force Survey over the period 1993 to 1996 and examines the
characteristics of male and female employees whose earnings are below
the LEL. In addition, the report includes comparisons of those earning
less than the LEL in NI with their counterparts in GB.
Main Findings
- The report suggests, inter alia, that there
are two main differences between NI and GB:
- Employees earning below the LEL work longer
hours in NI than GB and
- Men earning less than LEL in GB are more
likely to have higher qualifications than men in NI.
- The former means that the impact of the
National Minimum Wage, in terms of the proportions of employees who
earn less than the LEL, will be significantly different in NI than in
GB, and will require separate estimations. In addition, the effect of
raising the LEL to £81 will have a much greater effect in NI than GB,
and this too merits separate estimation.
Conclusions
- The analysis provides the first detailed
information on men and women who earn less than the LEL in NI. It underlines
the very great difference between men and women in terms of 'membership'
of the national insurance system and, therefore, access to national
insurance benefits. The report also demonstrates the need for a major
rethink of how part-time workers can be provided with social protection
on a par with that offered to other workers. Since the vast majority
of these workers are women, and often women whose employment has been
affected by caring duties, their social protection is a major equality
issue. It is worth noting that this research publication was initiated
before the report of the Low Pay Commission and therefore does not attempt
to estimate the impact of the minimum wage on those earning below the
LEL.
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