24% of employees are on low pay

Peter Cheese

There has been an increase in the number of people in low pay between the 1990s and 2010s, according to research by the Chartered Institute of Professional Development (CIPD).

Its Pay progression: understanding the barriers for the lowest paid report, which categorises low pay as those paid below 20% above the minimum wage, found that in 2011 less than a quarter (24%) of all UK employees were in low pay, equating to seven million people, compared to 15% of employees (four million) in the 1990s.

The research also found that over this period, on average, 19% remained in low pay, while 37% escaped low pay and 40% were in and out of low-paid work.

According to the report, the majority of those in low pay are women (64%), with women in low-paid employment being, on average, 47 percentage points more likely than similar men to still be in low pay after ten years.

The likelihood of getting out of low pay becomes less likely the older a person becomes. The research found that a typical employee aged 35 is 24 percentage points more likely to escape low pay than a similar person aged 45.

The research suggests that working part-time is also associated with a higher chance of being stuck in low pay.

There is also a clear relationship between pay and academic qualifications. GCSE level qualifications increase an employee’s chances of escaping a low-paid job by 40 percentage points, while A-level qualifications increase this by 59 percentage points and a degree by 71 percentage points.

Peter Cheese (pictured), chief executive of the CIPD, said: “Over most of the last six years, we have seen a significant fall in real wages, with evidence showing that the UK has a high proportion of workers employed in low wage roles compared with our international competitors.

“This research shines a light on these issues and has important implications for policy makers and employers.

“For policy makers, the key focus needs to be on how the supply of higher-skilled jobs can be increased across the UK economy. This means a focus on boosting demand for investment in skills among employers and improving how skills are developed and utilised in the workplace.

“At the same time, we need much better careers advice and guidance to help young people make the right choices about qualifications and career pathways which lead to higher paying jobs, and to support older workers who want to re-train and increase their earnings potential.

“For employers, there needs to be a focus on considering the untapped potential of part-time workers. Some part-time employees may be keen to take on more responsibility and progress, but are frightened to voice these wishes for fear that it will impact on their ability to work reduced hours.

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“By offering job-sharing opportunities or explicit progression paths for part-time workers, employers may find untapped reservoirs of talent and experience from within their existing teams.

“Employers should also think about designing jobs which enable employees to build their skills and use them to add value for the employer as alternatives to the management track, for example, in enhanced customer service roles.”