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The effect of bonuses on earnings growth in 2008
Examines the effect of bonus payments as a major influence on pay growth in the Average Earnings Index
Author: Harry Duff
Economic & Labour Market Review, vol 2, no 10, pp 30-32. ISSN: 1751-8334
This article examines the effect of bonus payments on the Average Earnings Index (AEI). The AEI is the National Statistic measure of short-term earnings growth. A separate article published last year in Economic & Labour Market Review (Duff 2007) describes the relationship between the AEI and the experimental series Average Weekly Earnings (AWE). AWE was the subject of a recent review (Weale 2008) and will remain as an experimental series until the recommendations of the review have been implemented. Bonus payments are a major influence on earnings growth as measured by the AEI. Changes in their level or the month in which they are paid can have a significant effect on growth rates. The majority of large bonuses are generally paid in the period December to April each year, and nearly 60 per cent of the total for that period is paid by the financial services sector. This article looks at the impact of bonuses on earnings growth during the period December 2007 to April 2008.
Published in web format: 13 October 2008 at 9:30 am
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