From City AM:
Professionals working in London are the poorest workers in Britain, despite earning the highest average salary, according to new research from job site CV-Library.
Based on new roles advertised in the third quarter of 2015, CV-Library calculated that the average annual salary in London is £36,905, which is 16.6 per cent greater than the national average of £31,625. However, according to the job site's research, premium costs in the capital “drastically outweigh the slightly higher-than-average salaries meaning Londoners have the least disposable income in the country”.
CV-Library's data shows that employees making an average salary in London are likely to end up with minus £964 each month after paying for basic costs, which include rent for a one-bed flat near the city centre, council tax, a local monthly travel card, basic utility bills and groceries. Professionals making an average salary in Aberdeen are likely to have the most disposable income in the UK, with £1,313 left over each month after basic costs are met.
Obviously they don't run up a deficit of £964 each month, that assumes they rent a one-bed flat near the city centre, they are more likely to be a sharing a flat a bit further out so as to at least break even, but hey. I didn't realise that Aberdeen rents were so much lower, but let's just take that as a given.
Yeah, Well…
57 minutes ago
8 comments:
I didn't realise that Aberdeen rents were so much lower, but let's just take that as a given.
Aberdeen rents are about £650/month for a one bed flat, or £1,000+ for a 2 bed. Aberdeen salaries are skewed by the oil and gas sector.
Even related civil servants (HSE offshore-specialist inspectors) get £80k per annum.
Office data entry folk who would be getting £8ph in Newcastle get more like £27k in oil and gas.
Time served skilled people with office jobs get £75k in oil and gas.
Senior managers in oil and gas all live in million pound houses near Balmoral and drive £100k supercars.
SL, aha, thanks for the back up info. So is the weather really horrible then? Why do they have to pay people so much to move there?
No, the weather isn't as bad as you would think. And when the sun does come out it's a lovely place. I don't know why oil and gas pay so well, they just do.
SL, in which case, that is the interesting question - I accept that working on an oil rig is a difficult and dangerous job and ought to be paid really, really well. But why do they pay so well for onshore stuff?
Whatever the answer to the first question, are the fall in the oil price and the much vaunted mass layoffs having any impact up there?
Advertised rents don't seem to be budging if that's what you mean? I moved here just over 3 years ago and I reckon rents have risen overall in that time. Rents on flats, especially 1 bed flats, seem to have risen the most.
Working on a rig really sucks by all accounts, 3 weeks at a time away from home shacked up in bunks with smelly men who snore. But most oil and gas workers (and the related industries) are onshore. And for some reason the pay is very high.
I've worked in the oil industry both offshore and onshore in Aberdeen. Although not since 2003. My experience of working offshore was actually quite enjoyable. But perhaps that just means that I was the smelly snorer. The only thing I didn't like was the helicopter trips there and back. Machines which rattle do not fill me with confidence, particularly when they are a couple of 1000 feet in the air. But actually being on the rig or flotel or whatever was pretty good, I thought.
But getting back to rents, I think the issue is that Aberdeen actually has a fair bit of industry apart from oil. It's a regional centre for agriculture and local government with a large hinterland. As a result there is quite a big spread of wages in the city and quite a variety of accommodation. Housing is not in particularly short supply and well=paid oil workers, particularly offshore ones, don't have to live in the city. In fact many of them live in the country or small towns surrounding the city. I myself commuted to work every day from Arbroath, 65 miles away because the roads were good; it didn't take long and housing in Arbroath was cheap. Plenty of other people did and do the same, albeit over a shorter distance. I could have moved closer but had personal reasons for not doing so.
So median rents reflect median wages which are low compared to London. And the number of oil and gas professionals (or indeed any professionals) is small enough that it doesn't have much impact on the median.
MW: SL, in which case, that is the interesting question - I accept that working on an oil rig is a difficult and dangerous job and ought to be paid really, really well. But why do they pay so well for onshore stuff?
I think it's a type of "rent bleed". The oil companies are rent harvesters, and although they are taxed accordingly, it [rent] also bleeds into wages. You can see this in Stavanger and the whole Norwegian oil sector, that had a noticeable cutback in oil jobs since the oil price fall. This fall in jobs doesn't match the fall in production, which is still trotting on on around in about the same tempo. Comparable professionals not working in oil are finally catching up.
I'm sure you're right, Kj. Companies which benefit from rent can afford to pay higher wages than companies which have to pay rent. And in a competitive jobs market, they will because doing so gives them the pick of the available employees.
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