Number of low-paid staff increasing

The proportion of employees in low-paid work across Britain increased from 21% to 22% last year, according to research by the Resolution Foundation.

minimum wage

Its annual audit of low pay across Britain, Low pay Britain 2014, also found that the number of people earning less than two-thirds of median hourly pay, q=equivalent to £7.69 an hour, rose to 5.2 million, representing an increase of 250,000 people on the previous year.

In addition, the absolute number of low paid rose by around 340,000 between April 2012 and April 2013.

The research also found that:

  • Almost one in four minimum wage employees, who have been in work over the last five years, have been stuck on the minimum rate for the entire time.
  • Just over a quarter (27%) of female workers earned less than £7.69 an hour last year, compared with 17% of men. However, in 1983, 33% of women were low paid compared with 8% of men.
  • Employees in Britain are more likely to be low paid than those in other broadly comparable economies such as Australia or Germany. They are also twice as likely to be as low paid than workers in Switzerland, and four times as likely as those in Belgium.

Matthew Whittaker, chief economist at the Resolution Foundation, said: “While recent months have brought much-welcomed news on the number of people moving into employment, the squeeze on real earnings continues. It’s troubling that the number of low-paid workers across Britain reached a record high last year.

“A growing rump of low-paid jobs also presents a financial headache for the government because it fails to boost the tax take and raises the benefits bill for working people.

”A focus on raising the minimum wage can certainly help the lowest-paid workers in Britain, but we need a broader low pay strategy in order to lift larger numbers our of working poverty.”

Frances O’Grady, general secretary at the Trades Union Congress (TUC), added: “Many of the jobs created since the crash are very much of the low-paid, casual and zero hours variety. This risks many people and their families simply being left behind, unable to share in any benefit from the economic recovery.

“What’s more, once in a low-paid job, it can be hard, if not nigh on impossible to get higher-paid work. Without a new approach, it’s quite likely that the overwhelming majority of the five million workers currently in low-paid work will still be stuck there a decade from now.”

 

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