There has been little progress in the number of people managing to escape from poorly paid jobs in the UK with women earning less than men, according to a report from the government’s Social Mobility Commission
The analysis finds that just 17% of low-paid workers managed to permanently escape from low pay in the last decade. Meanwhile, a quarter of low-paid workers remained permanently stuck and nearly half (48%) fluctuated in and out of low pay over the course of the last 10 years.
Women are more likely to be paid less than men and are also far more likely to get stuck in low pay. It is particularly difficult for women in their early twenties to escape low pay, with the lack of good-quality, flexible work to fit alongside childcare responsibilities as the most likely barrier.
However, there has been some long-term progress for women. Excluding those who exit the data over the following decade, the proportion of women getting stuck has fallen from 48% in 1981-1991to 30% in 2006 - 2016. In contrast, the risk of long-term low pay has increased for men over the same period (from 20% to 25%). This is likely due to the increasing number of men working in low-paid, part-time work.
The report finds that nearly two-thirds (64%) of workers who are ‘stuck’ in low pay are working part time, while nearly three-quarters (71%) of people who escaped low pay were working full time.
On average, people stuck in the low pay trap 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.
Age is also identified as a factor, with older workers far less likely to escape than their younger counterparts. The report finds that 23% of low-paid workers aged 25 or under escaped low pay over the following decade, compared to 15% of those aged 46 to 55.
The research highlights that while the national living wage is reducing the number of people in low-paid work - last year saw the biggest fall in 40 years - there will still be around 4m low-paid workers in 2020.
Alan Milburn, chair of the Social Mobility Commission, said: ‘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.
‘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.’
Low pay is defined as hourly earnings below two-thirds of the median hourly wage, excluding tips, commissions or other payments. The low pay threshold is estimated to be £8.25 per hour in 2017.
Report by Pat Sweet