Low pay remains a significant problem among UK workers with little sign of significant progress in reducing the number of people trapped in poorly-paid jobs, according to a new report from the Social Mobility Commission.
The ‘Great Escape?’ report, carried out by the Resolution Foundation think tank, found that just 1 in 6 low-paid workers have managed to permanently “escape” low pay over the last decade, with women the worst affected.
The report also found that during this time 1 in 4 low-paid workers remained permanently “stuck” in poorly-paid jobs, while almost half (48%) moved in and out of low-paid jobs over the same period.
Women are more likely to be trapped in dead-end jobs than men, particularly those in their early twenties who struggle to find well-paid jobs that fit alongside childcare responsibilities.
There has, however, been some progress in reducing the overall number of women trapped in low-paid work, with data showing a downward trend in the numbers getting stuck – from 48% in 1981 to 30% between 2006 and 2016.
Meanwhile, the number of men trapped in low-paid work increased over the same period, rising from 20% to reach 1 in 4 (25%) in 2016. The Social Mobility Commission warns this trend is likely to continue, as a growing number of men become stuck in low-paid, part-time employment.
The report shows that nearly two-thirds (64%) of workers trapped in low pay are in part-time employment, while 71% of people who escaped low pay were working full time.
The report’s finding’s give further weight to claims made by the Labour leader Jeremy Corbyn just last month, who speaking at the TUC Congress in Brighton warned that an “epidemic of low pay” is “leaving workers and their families locked in poverty”.
Being unable to move up the ladder from poorly-paid to higher-paid work comes at a severe cost, with those stuck in the low pay trap seeing a measly 40p extra per hour in real-terms, compared to £4.83 for those who managed to escape.
Younger workers are not the only ones trapped in a cycle of low pay, with older workers the least likely of all age groups to escape the low pay trap. While 23% of workers aged 25 and under managed to escape, only 15% of those aged 46 to 55 were able to do the same.
Low-paid workers were mostly likely to escape poorly paid work in Scotland, but least likely to escape in the North East.
While the introduction of the National Living Wage, which should not be confused with the real living wage, has helped to reduce the number of people in low-paid jobs, the report warns that without further action there will still be 4 million low-paid workers in 2020.
Alan Milburn, Chair of 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 skilled 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 2-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.”
He added: “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, said: “Britain has one of the highest proportions of low-paid work in the developed work.
“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.”