Thinktank shows that women and people in the north-east have most difficulty in breaking into higher earnings
A call centre in Newcastle. Workers in the
north-east find it the toughest to break out of low-paid jobs, according to the
Resolution Foundation. Photograph: Murdo Macleod
Almost three-quarters of
Britain's workers who were on low pay in 2002 failed to escape and
stayed stuck with poor wages over the course of the following decade, according
to one of the most comprehensive studies investigating Britain's lack of social
mobility.
The report
from the Resolution Foundation, an independent thinktank, shows that of the
4.7 million workers who were low-paid in 2002, 1.3 million (27% of the total)
didn't improve their earnings at any point during the decade and that a further
2.2 million (46%) moved in and out of low pay but had failed to escape it for
good by the end of the decade.
The findings will raise questions on the extent to which the current statutory minimum wage system is working and how much more needs to be done to improve the skills of those who receive poor pay.
The evidence from the decade 2002-2012 shows that women are much more likely to be stuck on poor pay than men. Of the women who were low paid in 2012, one in three (33 %) had been stuck on it over the preceding decade – 900,000 employees. This compares to just over one in five (21%) of men – 400,000 employees.
The north-east emerges as the region where workers are most likely to be stuck in a low pay rut. One in three (34%) of all low-paid workers in 2012 had been there for a decade. The East Midlands, Yorkshire, Humber and Wales were the next worst-affected areas, with three in 10 (31%) stagnating. In London and the south-east, the best-performing regions, this was true for fewer than one in four (23%).
Half of all workers who stayed stuck in the pay rut were aged between 41 and 60 in 2012, meaning they had spent up to 10 of their peak earning years (from age 30 to 50) in low pay. This suggests some people may remain stuck for their entire careers.
In perhaps the only good news from the survey, those who did earn more during the decade managed to progress a long way, with roughly half moving at least two-thirds of the way up the earnings scale by 2012
Employees working in retail, hospitality, sales and customers services, manufacturing and care are the least likely to break into higher earnings, suggesting more needs to be done to help them progress. For example, of women working in the retail sector in 2002, only one in six (15%) escaped low pay over the decade
The report, Starting Out or Getting Stuck?, uses the standard definition of low pay – two-thirds of median hourly earnings – which is £7.32 an hour, with the median at £10.98 an hour, both at today's prices. It uses data from the New Earnings Survey Panel Dataset, a longitudinal version of the Annual Survey for Hours and Earnings.
Guardian
