75% Of Low-Paid Workers Unable To Escape Poverty Pay Trap

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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.”

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  1. I was a single parent in the 1980s. The structure of the jobs market was then that most jobs were permanent and full time, and the benefits system such that the incentives for taking a part time job were low, and pressure to do it non-existent. Result, I stayed on benefits until I found a full-time job with sufficient pay to make me independent of “welfare”. (Actually I got 99p a week FIS, but that was an unexpected bonus and not a factor in my decision to take the job.)
    Had I been a single parent now I would certainly have been pressured into working part-time. I would have been more than happy to have taken a part-time job when my son was in school, especially if it improved my standard of living. With hindsight I do not think this would have improved my long-term career chances. Instead it would have diverted me down a path when my opportunities for progression were very restricted, and think it would have taken me a lot longer to get off benefits altogether.
    Also during the 1980’s I had the absolute security of knowing that if a job proved too much, I had an absolute right to resign from it and go back on benefits. If I had not had that, I would have made less ambitious choices. As it was, I did once resign and go back on benefits because I felt that I had bitten off more than I could chew and was failing both as an employee as a mother. That is not an option in the present climate, so I would have been unlikely to take the risk of a challenging job. Short-term aiming low for a “little part-time job” would have been a good decision. Long term it would have continued have constrained the career options open to me long after the reason I took a little part time job had grown up.

  2. I am really annoyed about this The poorest people in the in the UK are working people many if whom have childcare issues and they are the ones paying the price. It isn’t easier to stay or be better of, on benefits because of the cost of child care. There are other factors ie running a care to get to work or for work and during the working day. I know someone – who knows loads of folk in the same position. who really can not afford the rent or the car etc but are trying to stay at work. A family member of mine was planning to return to work after maternity leave. It would have cost the government more for her to go to work and she would have less money than she would have staying at home. He employer was totally inflexible as most are

  3. A an aside what has incensed me, today, is the statement by government , that people are being paid more. I have met many who are being paid less and nobody who is getting paid more

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