Completion of further work on the Jersey Income Distribution Survey 2002.

1240/5(1997)

QUESTION TO BE ASKED OF THE PRESIDENT OF THE POLICY AND RESOURCES COMMITTEE ON TUESDAY, 4th NOVEMBER 2003

BY DEPUTY G.P. SOUTHERN OF ST. HELIER

Question

In response to a question on 21st October 2003, the Vice-President of the Finance and Economics Committee suggested that further work was required to enable proper comparison between the Jersey Income Distribution Study 2002 and UK figures. Can the President confirm to members -

1. th a t this work has been done and shows that pay per workeris around 10 per cent higherin Jersey than in the UK?
2. th a t the much higher figures produced when householdincomes are compared are largely brought about by economic activity rateswhich are around 30 per cent higher in Jersey than in the UK?

Answer

In answering these questions let me point out that the Income Distribution Survey is the first comprehensive report of its kind. The Statistics Unit have taken great care to ensure that it presents a balanced picture across the Island in comparison with the U.K. It is, therefore, important that it is considered as a whole. The answers to the specific questions are as follows:-

1. T h e Statistics Unit hasexamined the appropriate statistical sources andcanconfirm,subject to the normal margins of uncertainty, that grosspayperfull-time equivalent workerin2002wasabout10per cent higher in Jersey than in Great Britain. Net pay per worker, after deducting tax and social security contributions isestimated to beabout23 per cent higher in Jersey. Pensionerincomes in Jersey and income from investment are alsobelievedtobehigher than in theUK.
2. T h e average numberoffull-time equivalent workers per householdinGreat Britain, basedonnumbersof workers and households from the LabourForceSurvey, is estimated at 0.96. Thecorresponding figure for Jersey, in both the IncomeDistributionSurveyandtheCensus,was1.24.

T h e re are three factors contributing to the higher number of workers per household:

Firstly, household structure: the average Jersey household, while it has exactly the same number of

people as in the UK, has fewer children and pensioners and more adults of working age.

Secondly, more working age adults in Jersey are in work – the Census showed that both men and

women had higher economic activity rates and lower unemployment rates than in the UK.

Thirdly, our ratio of full-time to part-time workers is higher than in the UK.

O n a simple comparison of households, gross cash income from all sources, including pensions, benefits

and investment income is estimated to be 37 per cent higher in Jersey. After deducting income tax and social security contributions, household disposable income is some 54 per cent higher, averaging £685 per week in Jersey and £444 per week in Great Britain.

W  h e n we equivalise' these figures to take account of the different household structures in the two

jurisdictions and reflect relative standards of living within them, we arrive at average equivalised personal incomes, before taking housing costs into account, some 75 per cent higher in Jersey. After deducting housing costs, the difference falls to 62 per cent.

A l l th e figures I have quoted so far are based on simple averages, which can be distorted by a few very

high incomes. For many purposes statisticians prefer to use the median, where half of the population lie above and

half below, because it is not subject to the same distortion. Median equivalised personal incomes were 68 per cent higher in Jersey than in Great Britain before deducting housing costs and 46 per cent higher after deducting housing costs. It is these lower median figures which were used by the Statistics Unit as the basis for their comments.

T h e r eport stated that this relationship is reflected right across the income distribution.