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Despite last year's introduction of the National Living Wage, which saw the biggest fall in 40 years in the number of people in low-paid work (and not forgetting its predecessor the National Minimum Wage, introduced at the back end of the last century), low pay is endemic in the UK and there's been little progress in the number of people managing to escape from poorly paid jobs.
A report released today by the Social Mobility Commission, explores pay trends over recent decades and examines the factors linked to low pay and progression. It finds that just one in six low-paid workers managed to permanently escape low pay in the last decade, a quarter remained permanently stuck in low pay and nearly half fluctuated in and out of low pay.
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! While there's been some progress for women over recent decades, they're more likely to be low paid and far more likely to get stuck in low pay, with those in their early twenties struggling most, thanks to a lack of good-quality, flexible work to fit alongside childcare responsibilities as the most likely barrier.
The risk of long-term low pay has increased for men (from 20% to 25%); since more men are now in low-paid, part-time work. Nearly two-thirds of workers 'stuck' in low pay are working part time, while nearly three-quarters of those who escaped low pay were working full time. Older workers are far less likely to escape low pay than their younger counterparts... 23% of low-paid workers aged 25 or under escaped low pay over the decade, compared to 15% of those aged 46 to 55.
The Social Mobility Commission is calling for a new approach to break the cycle, saying welfare policy should focus on moving people from low pay to living pay and that Government should join forces with employers in a new national effort to improve progression and productivity at work. It says employers need to improve career routes for staff, while Government should support them with a welfare system that encourages progression at work. Knowing how many of those holding key positions in the top companies in our industry started off as cleaners, I can't think of a better place for Government to look for inspiration, can you?
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19th October 2017