Getting trapped in low-paid work

Almost three-quarters of those workers who were on low pay in 2002 failed to escape from it over the course of the following decade, reveals a new study from the Resolution Foundation think tank.

The study uses data from the New Earnings Survey Panel Dataset, a longitudinal version of the Annual Survey for Hours and Earnings (New Earnings Survey before 2004).

Key points

  • Of the 4.7 million workers who were on low pay in 2002, 1.3 million (27 per cent) failed to escape low pay at any point between then and 2012.
  • A further 2.2 million (46 per cent) workers 'cycled' in and out of low pay, but had failed to escape it for good by the end of the decade. Only 800,000 workers (18 per cent) moved up the earnings ladder without slipping backwards over a sustained period during the decade examined. A further 400,000 (9 per cent) retired or otherwise left the labour market
  • Nonetheless there has been a slight increase over time in the numbers escaping low pay, and a fall in the proportion stuck on it. Mobility for those on low pay increased in the 2000s compared with the 1990s. And of those who did escape low pay, many progressed a long way up the earnings ladder.
  • Women are much more likely than men to be stuck on low pay. Of the women who were on low pay in 2012, one in three (33 per cent) had been stuck on low pay over the preceding decade. This compares with just over one in five (21 per cent) of men.
  • Half of all workers stuck over the decade were aged between 41 and 60 in 2012 – meaning that they had spent up to ten of their peak earning years (from age 30 to 50) in low pay. This suggests that some people may remain stuck for their entire careers.
  • Of the minority who managed to escape low pay during the decade, many progressed a long way – with roughly half at least two-thirds of the way up the earnings scale by 2012.

Source: Alex Hurrell, Starting out or Getting Stuck? An Analysis of Who Gets Trapped in Low Paid Work - and Who Escapes, Resolution Foundation
LinksReport | Guardian report (1) | Guardian report (2)

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