Neil Lee, Anne Green and Paul Sissons
An extended version of this blog post was originally published in Discover Society on 9 January 2018.
The UK has a low pay problem. The traditional policy mix has been work-first employment policies to get people into employment regardless of the job, a minimum wage to prop up low wages, alongside economic development policies focused on high-end sectors and investments in science and innovation. The result has been strong employment creation but one of the worst rates of low pay in the OECD. Around a fifth of the UK’s workforce are in low pay, defined as earning less than two thirds of national median weekly pay. Low pay has been compounded by wage stagnation: between 2008 and 2015 the only OECD country with worse wage growth was Greece.
Much of this low pay is in a small number of sectors which are set to grow significantly in the future, which will only proliferate the low pay problem. Through our close analysis of sectoral differences and the dynamics of low-paid sectors in our new article in Policy & Politics, we reveal that instead of the current policy focus, efforts to improve productivity and earnings mobility in low-pay sectors, could improve living standards as well as the UK’s overall economic performance Continue reading