Part 2: Pay and conditions
Overall, the respondents reported very low rates of pay (Table 3). The majority of workers interviewed (more than 90%) were found to earn below the London Living Wage (£6.70/hr). Indeed, while representing a very small minority of the sample, a dozen workers reported that they earned below the National Minimum Wage (NMW, set at £4.85/hr at the time of the research), which is in breach of the law. One in every five workers earned the NMW.
Hourly Rate < £4.85
£4.85 Between £4.86 and £5.50 Between £5.51 and £6.69 £6.70 and over No response = 14
65 137 84 29 327
19.9 41.9 25.7 8.9 100
The average earnings for the whole sample was £5.45 an hour. With respondents working on average 36 hours a week this translates into an average annual salary of just £10,200 a year before tax and National Insurance deductions. Such a figure is less than half the national average annual salary (£22,411) and less than a third of the London average annual salary (£30,984) (Guardian Unlimited, 2005).
Table 3: Respondents’ Hourly Rates of Pay
Despite a widespread perception that migrant workers often work 'informally' or 'off the books', the vast majority of respondents across all sectors reported formalised working relations. For example, the majority claimed they had formalised written work contracts (86%), paid tax and National Insurance (94%) and received pay slips from their employers (95%).
Previous research has shown that the poorest groups in Britain depend very heavily on means tested benefits (Berthoud, 1998). However, despite being on very low wages and paying tax and National Insurance, very few respondents actually claimed benefits to help supplement their income. Indeed, only a very small minority of workers or their partners (16%) claimed any kind of state benefits. Of those who did claim, over one quarter claimed Working Tax Credits, which are specifically designed to top up the earnings of working people on low earnings, including those without children.
The very low uptake of benefits may be attributed to legislation which currently makes it very difficult for migrant workers to claim these benefits. For instance,
3 Ten of those workers who earned below the National Minimum Wage worked in hospitality. The majority of these comprised chambermaids who were paid piece-rates of around £2 per cleaned room. According to them, the pay rate was based on the management’s assumption that two rooms can be cleaned in one hour, on average. The remaining two workers who earned below the NMW were found in the ‘cleaning and other services’ category.