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19/10/2017 - Low pay becoming permanent for many

paysqueezeFigures published today show that a quarter of low-paid workers are permanently stuck on poor wages.

The Social Mobility Commission’s warning of endemic low pay follows separate figures showing real wages falling for the sixth month in a row.

 

The commission, chaired by the former New Labour cabinet minister Alan Milburn, reported that people stuck on low pay have seen their hourly wages rise by just 40p in real terms over the last decade.

 

One in six workers have managed to moved to better-paid jobs in the past decade, with half fluctuating in and out.

 

Mr Milburn said: “Britain has an endemic low-pay problem. While record numbers of people are in employment, too many jobs are low-skill 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.”

 

The study was conducted by the Resolution Foundation, whose senior policy analyst Conor D’Arcy said: “This lack of pay progress can have a huge scarring effect on people’s lifetime living standards.”

 

Figures released yesterday showed that average earnings increased by 2.2 per cent in the year to August, unchanged from the previous month’s figures. This is well below the retail price index of inflation, which stands at 3.9 per cent, and the consumer price index, at 3 per cent.

 

TUC general secretary Frances O’Grady said: “Pay packets are taking a hammering. This is the sixth month in a row that prices have risen faster than wages.

“Britain desperately needs a pay rise. Working people are earning less today [in real terms] than a decade ago.”


Ms O’Grady called on Chancellor Philip Hammond to “ditch” the pay cap in his Budget next month.

 

Pat Harrington, general secretary of Solidarity, said: "Ditching the pay cap would be a start. There are many things the Government could do to eliminate low pay. I'd like to see the current welfare system replaced with tax reforms and a universal basic income ultimately. I'd also like to see people in the gig economy given worker status, strong unions negotiating wages in all sectors and a recognition that we need a massive social housing building project to provide affordable housing. I want a future government to introduce legislation to encourage worker trusts and co-operatives. Only radical reform will bring about change and end low pay and dependency."