One in four workers permanently stuck in low paid work, finds study

People stuck on low pay have seen their hourly wages rise by just 40p in real terms over the last decade Reuters

One in four low paid workers are “permanently stuck” in poorly paid jobs, with little chance of earning higher salaries, a new study finds.

Low pay is “endemic” in the UK, especially among women in their early 20s who juggle work with childcare responsibilities, said the Social Mobility Commission.

Research showed that one in six low paid workers managed to permanently move to better paid jobs in the past decade, with half fluctuating in and out.

On average, people stuck on low pay have seen their hourly wages rise by just 40p in real terms over the last decade, compared to a £4.83 pay rise for those who have permanently “escaped”, said the report.

Older people are less likely to leave low paid jobs than their younger counterparts, while low paid workers were mostly likely to escape in Scotland and least likely to escape in the North East, it was revealed.

Former Labour government minister Alan Milburn, who chairs the Social Mobility Commission, said: “Britain has an endemic low pay problem. While record numbers of people are in employment, too many jobs are low skill and low paid. Millions of workers – particularly women – are being trapped in low pay with little chance of escape. The consequences for social mobility are dire.

“Britain’s flexible workforce gives us global economic advantage but a two-tier labour market is now exacting too high a social price. A new approach is needed to break the vicious cycle where low skills lead to low pay in low quality jobs. Welfare policy should focus on moving people from low pay to living pay.

“Government should join forces with employers in a new national effort to improve progression and productivity at work. Without concerted action, Britain will become more socially divided and social mobility will continue to stall.”

Conor D’Arcy, senior policy analyst at the Resolution Foundation, which conducted the study, said: “Britain has one of the highest proportions of low paid work in the developed world, and while three-quarters of low-paid workers did manage to move into higher-paying roles at some point over the past decade, the vast majority couldn’t sustain that progress. This lack of pay progress can have a huge scarring effect on people’s lifetime living standards.

“The national living wage is playing a massive role in reducing low pay, but it can’t solve the problem alone. Employers need to improve career routes for staff, while government should support them with a welfare system that encourages progression at work.”

PA