One in four low paid workers are “permanently stuck” in poorly paid jobs, with little chance of earning higher salaries, a new study finds.
Low pay is “endemic” in the UK, especially among women in their early 20s who juggle work with childcare responsibilities, said the Social Mobility Commission.
Research showed that one in six low paid workers managed to permanently move to better paid jobs in the past decade, with half fluctuating in and out.
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”, said the report.
Older people are less likely to leave low paid jobs than their younger counterpart, while low paid workers were mostly likely to escape in Scotland and least likely to escape in the North East, it was revealed.
Former Labour government minister Alan Milburn, who chairs the Social Mobility Commission, 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.
“Britain’s flexible workforce gives us global economic advantage but a two-tier labour market is now exacting too high a social price. A new approach is needed to break the vicious cycle where low skills lead to low pay in low quality jobs. Welfare policy should focus on moving people from low pay to living pay.
“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.”
Conor D’Arcy, senior policy analyst at the Resolution Foundation, which conducted the study, said: “Britain has one of the highest proportions of low paid work in the developed world, and while three-quarters of low-paid workers did manage to move into higher-paying roles at some point over the past decade, the vast majority couldn’t sustain that progress. This lack of pay progress can have a huge scarring effect on people’s lifetime living standards.
“The national living wage is playing a massive role in reducing low pay, but it can’t solve the problem alone. Employers need to improve career routes for staff, while government should support them with a welfare system that encourages progression at work.”
Young Women’s Trust chief executive Carole Easton commented: “Young people, and particularly young women, are getting stuck on low pay and have little hope of finding a way out.
“As a result, we are seeing many young people struggling to make ends meet, falling into debt and using foodbanks to put food on the table.
“It can be especially hard for young mums. In many cases, low pay means an hour’s childcare can cost more than an hour’s wages.”
Business Department spokesman said: “We have more people in work than ever before, taken 1.3 million people out of income tax altogether since 2015 and the national living wage has delivered the fastest pay rise for the lowest earners in 20 years.
“But we want to go further by creating good quality jobs for all through our modern industrial strategy, boosting earning power and improving living standards across the country.”