One in four UK workers ‘permanently trapped’ in poorly paid jobsHeat Profit
Poorly paid jobs are becoming “endemic” in Britain, with around 25% of low-paid workers permanently trapped in positions with low salaries, a new study has shown.
According to figures published by the Social Mobility Commission on Thursday (19 October), only one in six workers in low-paid jobs had managed to move onto better employment over the last 10 years. In the report, low pay is defined as hourly earnings that amount to less than two-thirds of the median hourly wage, which stood at £8.10 last year.
The report added the median hourly wage for an average worker in Britain last year was £12.10. If the disparity in hourly wages was worrying, the gap in salary increase in real terms painted an even bleaker picture for low-paid workers.
The figures showed that over the last decade people stuck on poorly paid jobs have seen their hourly wages rise by only 40p in real terms, while workers in better paid jobs have enjoyed a rise of £4.83.
Retail and hospitality were the industries with the lowest-paid jobs, while women in their early 20s were among those hit the hardest by the issue, mainly due to a lack “good quality, flexible work”.
“This lack of pay progress can have a huge scarring effect on people’s lifetime living standards,” said Conor Darcy, a senior policy analyst with think tank Resolution Foundation, which carried out the research.
Darcy added “a more comprehensive response from business and government” was needed to ensure people were given the opportunity to escape the low-pay environment.
“We have more people in work than ever before, taken 1.3 million people out of income tax altogether since 2015 and the national living wage has delivered the fastest pay rise for the lowest earners in 20 years,” said a spokesman for the Business Department.
The report comes a week after the ONS warned wages continued to lag behind inflation.
Average weekly earnings rose by 2.2% year-on-year, in line with the gain recorded in the previous month and slightly above the 2.1% figure analysts expected.
Earnings excluding bonuses, meanwhile, held steady at 2.1%, marginally above the 2% forecast. However, when the impact of inflation is factored in, real weekly wages fell by 0.3%, when including bonuses and by 0.4% when excluding bonuses, compared with a year earlier.