Low earners 'need Government help'
Updated on 11 November 2009
The Government has been urged to do more to help low earners who lose their jobs get back into work.
Independent research group the Resolution Foundation said if people on low incomes were not helped to remain in work, they were at risk of becoming dependent on the state.
It said on average low earners had an annual household income of just £15,800, while they often had no savings and were more likely to be in negative equity than higher earners.
It warned that many people in this group worked in industries that were vulnerable to the recession. Around 35% of people working in the wholesale and retail sector are on low incomes, while 26% of workers in construction and 25% in manufacturing also fall into this group.
Once out of work, this group is at risk of becoming long-term unemployed due to the lower level of skills and qualifications they have, while they are also less likely than higher earners to receive sizeable redundancy payments.
The Resolution Foundation warned that around 7.2 million low earners would continue to be at risk of losing their jobs long after the recession was technically over, due to the industries they work in.
It is calling on the Government to help low earners who lose their jobs get back into work as quickly as possible by bringing forward the formal skills assessment from 26 weeks to 13 weeks after people have been made unemployed.
It said it should also be made easier for people to combine real jobs with useful training by allowing people who were training to be eligible for the working tax credit.
Sue Regan, chief executive of the Resolution Foundation, said: "Low earners are being hit hard by the recession.
"This report shows that low earners will continue to lose jobs, homes and get into financial trouble unless further support is available. Without this action, low earners will slide from coping to crisis."
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