Low pay in the UK should be a cause for great concern.
With one in five workers on a low wage, and the UK ranking poorly against other developed economies in terms of the prevalence of low pay, far too many people suffer from in-work poverty, their life chances limited by low income.
These concerns are all the more pressing today.
In-work benefits: sustainable?
Government spending, which has in recent decades acted to redress low pay through the tax credit and benefits system, is very unlikely to supplement the incomes of low paid workers to the extent it has in the past, given ongoing cuts to public expenditure.
Yet in examining low pay, far too little attention is devoted to understanding the role labour
markets play in determining how people’s fortunes evolve over time.
In particular, we do not possess sufficient knowledge about the extent to which the low paid are able to get on in life by working their way up the earnings scale.
Pay mobility trends
In previous work, the Resolution Foundation has examined trends in pay mobility across the earnings scale. In this paper we undertake an in-depth analysis of pay progression amongst the low paid, using data that tracks earnings between 1975 and 2012.
Our analysis details the extent of low pay persistence today, and how this has changed over time. We also identify the groups who are less likely to progress out of low pay and those who are more likely to do so.
This paper addresses the following questions:
- Are there significant numbers of low paid workers who remain stuck on low pay for long periods of time?
- Are low paid workers more likely to remain stuck on low pay now than in earlier periods?
- Are there systematic differences between the low paid who progress and those who do not?
How can those in low pay jobs be transitioned to high pay jobs? Share your thoughts on low pay using the comments section below.
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