75% Of Low-Paid Workers Unable To Escape Poverty Pay Trap
Only one in four workers in the UK have successfully managed to escape low-paid employment in the last decade, a new report reveals.
The report – Escape Plan – written by the Resolution Foundation for the Social Mobility and Child Poverty Commission, found that only 25% of low-paid workers were able to permanently escape the low-pay poverty trap over the course of an entire decade.
The majority of workers were hit by an unenviable case of one-step forward and two-steps back, falling back into low-paid employment whenever they managed to escape.
12% were permanently stuck in dead-end low-paid jobs for each and every year over the last decade, forced to survive on low wages with limited opportunity for progression.
Workers who were able to escape the low-pay poverty trap saw their wages grow by an average of 7.5% in real terms over the decade, while those who were unable to escape low paid work saw their wages grow half as fast (3.6%).
The Resolution Foundation used official data to track workers over a decade to find out how far up the employment ladder they were able to progress. The independent think tank also investigated what factors may have played a part in pay progression.
Several factors were identified as being positively associated with escaping low paid employment, such as a higher level of education and a ‘positive outlook’. Businesses who assist with career development and offer greater opportunities for progression into higher-paid positions were are also a major factor, says the Resolution Foundation.
However, the report identifies a number of significant barriers to pay progression including disability, gender, part-time employment, being a single parent or an older worker.
The strong link between part-time employment and poor pay progression will be particularly disconcerting for the 6.8 million people currently working part-time in the UK – three-quarters of whom are women.
Part-time workers are offered fewer opportunities to progress within a company to higher-paid positions than full-time workers, say the Resolution Foundation. The hospitality industry such as restaurants and take-aways were found to have particularly poor escape rates.
Vidhya Alakeson, Deputy Chief Executive at the Resolution Foundation, said:
“Britain has a long-standing low pay problem, with over a fifth of the workforce in poorly paid jobs. But the limited opportunities for escaping low pay is just as big a concern as it has huge consequences for people’s life chances.
“While relatively few workers are permanently trapped in low pay, just one in four are able to completely escape. More permanent escape routes are needed for the huge number of workers who move onto higher wages but fail to stay at that level.
“Some groups clearly find it more of a challenge than others to rise up the pay ladder. Breaking down the barriers to promotion faced by disabled people, single parents, part-time and older workers is crucial to reducing the share of low pay across the workforce.
“We know that even in sectors dominated by low pay it is possible for staff, assisted by employers, to progress their career and earn more. But for this to happen we need more employers to take the issue seriously and have effective plans to promote pay progression.”
The Rt Hon Alan Milburn, Chair of the Social Mobility and Child Poverty Commission, added:
“The majority of Britain’s poorest paid workers never escape the low pay trap. Too many simply cycle in and out of low paying jobs instead of being able to move up the pay ladder. Any sort of work is better than no work but being in a job does not guarantee a route out of poverty.
“This research provides compelling evidence for employers and government to do more on pay progression. It is a powerful argument for Britain to become a Living Wage country.”
