26 Oct 2014

Record number of Britons stuck on low pay

A record 5m people in Britain are stuck on low-paid jobs, posing real problems with living costs but also risking longer term damage to the economy.

An extra 250,000 people joined the ranks of the low-paid last year, bringing the total to a new high of 5.2m, according to a report from the Resolution Foundation.

The figures reflect the number of people earning less than two thirds of median hourly pay, equal to £7.69 an hour.

The proportion of low-paid workers has barely moved in the last 20 years Matthew Whittaker, the Resolution Foundation

The increase in low-paid workers is partly due to the rise in employment overall, but Britain is more likely to employ people on lower pay than countries such as Germany or Australia.

The number of low-paid workers has become a serious problem, said the report, with almost one in four being stuck on that rate for the last five years.

Matthew Whittaker, chief economist for the Resolution Foundation, said that while low pay was likely to be better than no pay at all, being stuck on a low wage “creates not only immediate financial pressures, but can permanently affect people’s career prospects.”

Long-term problems

“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,” he said.

Record number of Britons stuck on low pay

“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.”

Earlier this month, tens of thousands of workers marched through London to call for an end to austerity and pay rises for public sector workers.

The TUC said between 80,000 and 90,000 people took part in a march and rally in London’s Hyde Park under the banner Britain Needs a Pay Rise.

The protest followed industrial action by public sector workers, including the first ever strike by midwives, who were angry at the government’s refusal not to award a recommended 1 per cent pay increase to all NHS staff.

Mr Whittaker added: “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.”