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UK – Two tier workforce condemning millions to low-paid jobs

02 September 2013

In 2013, 32% of new employees entering the workforce took on temporary jobs, while 37% took on part time work, compared with 27% and 35% in 2007, respectively. A study by the Resolution Foundation called ‘Low Pay Britain 2013’ has highlighted fears that a return to growth and higher employment is masking an ever widening divide between people in low skilled and insecure work and those in an upper, more stable, tier of employment, according to the Guardian.  

The report comes as the three main political parties wrestle with ways to address the gulf between declining real wages for millions and the increasing cost of living, as they plan for the 2015 general election.

In 1975, part-time workers made up just 30% of the low-paid population (1.1 million). Today that figure has almost doubled to 58% (2.9 million). The share of low-paid workers in temporary jobs has also increased from 8% (390,000) in 2000 to 13% (670,000) in 2012. In 2007, part-time workers made up 55% of the low-paid (2.8 million people), and temporary workers 11% (570,000 people).

According to the Guardian, Labour will put its support for a "living wage" – higher than the minimum wage and judged as necessary for a decent standard of living – at the heart of its next election manifesto, citing it as one measure to help ease what it calls a crisis of living standards.

Low pay (defined as two-thirds of gross hourly median pay; £7.44 an hour in 2012) is becoming more prevalent among the young, the report says, and the trend seems to be continuing even as the economy improves. Today more than one in three people aged 16-30 (2.4 million) are low-paid, compared with one in five in the 1970s (1.7 million at that time).

Matthew Whittaker, senior economist at the Resolution Foundation, commented: "Jobs growth is welcome news and hailed by many as a sign of economic recovery. But this may conceal a worrying scenario in which the two-tier workforce we have seen developing becomes an established feature on the landscape.”

"This is a jobs market where many workers are stuck in low-paid, low-skilled jobs, overwhelmingly in the service economy and often part-time or temporary. Younger workers, women and those living outside London are most at risk.”

He concluded: "It's too soon to say if this scenario is inevitable, but early evidence shows that economic recovery may not be enough to avert it. The economies of other OECD [Organisation for Economic Co-operation and Development] countries face many of the same labour market pressures as Britain, yet often perform much better on low pay – we risk looking complacent in comparison."

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