‘Record number’ in low-paid jobs

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Published: Sunday 26th October 2014 by The News Editor

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A record five million workers are now in low-paid jobs, according to a new report, sparking calls for Government action to help tackle the problem.

The Resolution Foundation said the numbers earning less than two thirds of median hourly pay – equivalent to £7.69 an hour – increased by 250,000 last year to reach 5.2 million.

The increase partly reflected growth in employment, but there was also a reverse in the previous year’s slight fall in low-paid work, said the think tank.

The report said there was a serious problem of people being stuck in low-paid jobs, with almost one in four minimum wage employees still on that rate for the last five years.

Workers in Britain are more likely to be low paid than those in comparable economies such as Germany and Australia, said the Resolution Foundation.

The think tank’s chief economist, Matthew Whittaker, said: “While recent months have brought much welcome news on the number of people moving into employment, the squeeze on real earnings continues. While low pay is likely to be better than no pay at all, it’s troubling that the number of low-paid workers across Britain reached a record high last year.

“Being low paid – and getting stuck there for years on end – creates not only immediate financial pressures, but can permanently affect people’s career prospects. 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.

“All political parties have expressed an ambition to tackle low pay. Yet the proportion of low-paid workers has barely moved in the last 20 years. A focus on raising the minimum wage can certainly help the very lowest paid workers in Britain, but we need a broader low-pay strategy in order to lift larger numbers out of working poverty.

“Economic growth alone won’t solve our low-pay problem. We need to look more closely at the kind of jobs being created, the industries that are growing and the ability of people to move from one job or sector to the other, if we’re really going to get to grips with low pay in Britain today.”

A Department of Business, Innovation & Skills spokesman said: “The economy is on the road to recovery. With more people in work than ever before, the Government wants to help all workers share the benefits of economic growth. This month we implemented the first above-inflation rise in the national minimum wage since 2007.

“But we want to go further. That is why we have taken continued action to help low-paid workers by taking lower earners out of income tax and asking the Low Pay Commission to consider how we can further increase the real value of the national minimum wage, without having an adverse impact on jobs.”

Catherine McKinnell, shadow treasury minister, said: “These figures show that too many people are in low-paid jobs under this Government.

“Working people are over £1,600 a year worse off since the last election, which is why most people are still not feeling the recovery.

“Labour’s economic plan will create more good jobs and make work pay. We will raise the minimum wage to £8 an hour by 2020 and give businesses tax incentives to pay the living wage.

“We will also boost vocational education and apprenticeships, expand free childcare for working parents and introduce a lower 10p starting rate of tax.

“In contrast, the Tories only stand up for a privileged few.”

TUC general secretary Frances O’Grady said: “Last weekend 90,000 joined our march to call for a pay rise for workers across Britain and this report shows why.

“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 – while those at the top take an increasing share of the nation’s wealth.”

Published: Sunday 26th October 2014 by The News Editor

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