Pay is an important element in the price of labour and will obviously be affected by demand and supply factors. Unemployment levels, therefore, affect pay but it is difficult to establish the exact relationship as many other factors are involved such as skill levels and the type of labour in demand. Low pay tends to be associated mainly with certain occupational categories, the characteristics of the individuals concerned and particular sectors of industry and services rather than with overall employment levels.
Research on low pay suggests that the bulk of low paid full-time workers are in the categories of unskilled and semi-skilled manual workers, the lower grades in clerical and office employment and general indoor sales staff. Age, length of service and work experience have a major influence on the level of earnings and the sectors referred to are normally associated with high levels of labour turnover. Research also suggests that there is a link between low pay and employment patterns, particularly part-time working, and that this in turn affects mainly women, school leavers and older workers.
It is fair to suggest that high unemployment has some effect on pay levels of young people. Increasing the level of job opportunities available is to the advantage of workers generally. The creation of additional employment and the maintenance of an environment conducive to job creation remain important priority areas of Government policy.