The Office for National Statistics today announced two new experimental labour market measures. The Index of Labour Costs per Hour (ILCH), which for the first time shows changes in employers’ total labour costs, including both wages and non-wage elements. The second index is the Average Weekly Earnings (AWE) measure, which for the first time gives a monthly average figure, which reflects the changing nature of the economy. It is expressed in pounds and pence.
In a statement released today, National Statistician Len Cook welcomed these developments,
“Together with ONS.s existing Average Earnings Index and Annual Survey of Hours and Earnings, the ILCH and the AWE create one of the most comprehensive packages of earnings and labour costs statistics in Europe. The new measures will help monitor inflationary pressures coming from the labour market.”
The ILCH goes beyond existing earnings indicators, covering nonwage costs as well as wages and salaries. Non-wage costs include those relating to employee sickness, maternity and paternity leave, as well as employers’ pension and National Insurance contributions and benefits in kind, such as company cars.
The ILCH provides information on the cost of labour per hour worked, removing the effects of changes in work patterns to help users track changes in the cost of labour.
The AWE series is designed primarily to look at short-term changes in earnings. Unlike the Average Earnings Index (AEI), it captures changes in earnings due to the change in the composition of employment between industries. This is because the weightings of different industries in the index are updated every month, whereas AEI industry weights are updated once a year.
The ILCH and AWE will be published as experimental statistics while ONS conducts quality assurance and consults users and expert advisers about the development of the two new series. Once quality assurance is complete, ONS will publish the ILCH quarterly and AWE monthly as National Statistics.
