Examines the effect of bonus payments as a major influence on pay growth in the Average Earnings IndexThis article examines the effect of bonuspayments on the Average Earnings Index(AEI). The AEI is the National Statisticmeasure of short-term earnings growth.A separate article published last year inEconomic & Labour Market Review (Duff2007) describes the relationship betweenthe AEI and the experimental seriesAverage Weekly Earnings (AWE). AWEwas the subject of a recent review (Weale2008) and will remain as an experimentalseries until the recommendations of thereview have been implemented.Bonus payments are a major infl uenceon earnings growth as measured by theAEI. Changes in their level or the month inwhich they are paid can have a signifi canteffect on growth rates. The majority oflarge bonuses are generally paid in theperiod December to April each year, andnearly 60 per cent of the total for thatperiod is paid by the fi nancial servicessector. This article looks at the impact ofbonuses on earnings growth during theperiod December 2007 to April 2008. Economic & Labour Market Review (2008) 2, 30–32; doi:10.1057/elmr.2008.152
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