From locking down to levelling up

• Wales has managed to halve its employment gap with the UK. That gap, which opened up after the 80s and 90s recessions and was between 4 and 5 percentage points throughout the early and mid-1990s, has been reduced to just 2 percentage points by 2019.
• Typical hourly pay across Wales was 9 per cent lower than the UK average last year, at £12.20 compared to £13.30, a gap that hasn’t changed in since the 1990s.
• Household incomes gap between Wales and the UK have fallen from 10 per cent in the mid-1990s to 7 per cent in 2018-19. However lasting pay gaps mean that typical household incomes in Wales are still, at £22,300 a year, the second lowest of any UK nation or English region.
• Employment has grown fastest in traditionally low employment areas such as Cardiff and Gwynedd, while a fast-rising minimum wage has seen pay grow fastest in low pay areas like Bridgend and Caerphilly.
• The jobs hit has been of a similarly magnitude to the rest of the UK despite slightly tighter lockdown restrictions. This is in contrast to the well above average falls in employment seen in Wales during the recessions of the 1980s and 1990s.

Key challenges:

• A return to high unemployment post-pandemic.
• A growing share of its younger workforce work in retail, hospitality and leisure – the low-paying sectors that have been hit hardest by the crisis. Currently, over half (52 per cent) of workers in their early 20s work in these sectors, up from 44 per cent among those born a decade earlier.
• Over a third (35 per cent) of non-pensioner households across Wales will lose over £1,000 next year if planned benefit cuts go ahead. This leaves over 300,000 Welsh households at risk of a large income drop in April, unless the Chancellor changes course.
• The typical age in Wales is – at 42.5 – older than the UK average of 40.3, and that the country is growing older faster too. This means the challenges of adapting to an ageing population are particularly acute in Wales.