Low-wage work has for many people become a sinkhole from which there may be no escaping, new research has shown.
One in five people who were in low-paid roles a decade ago are still barely eking out a living at or just above the minimum wage, according to a new TUC report. The retail sector is the worst for pay progression — 42 per cent of low-paid workers in retail are still stuck in low-paid positions ten years later.
This is bad news for millions of people who work in retail, which is one of the biggest sectors in the economy, providing one in eight jobs and powering 10 per cent of the UK’s total economic output. It’s even worse news still for young people in the sector, who are most likely to be on the low end of the wage spectrum.
Median pay for people aged 18-29 in retail is only £8.42 per hour – not far above the mandatory minimum wage, whereas median pay for the age group as a whole is near £10 per hour and for the entire population it is substantially higher at £12 an hour.
While as a whole, 9 out of 10 low paid teenagers at the beginning of the century managed to escape low pay once they were in their late 20s, only about one in four low paid teenagers in retail moved on to higher-paid positions over the same time period.
The Fabian Society, which teamed up with the TUC in their latest report published this week (May 3) said that progression opportunities for the average retail worker are “few and far between.”
“Retail is now right at the bottom of the pay and progression league tables, and the sector has developed a reputation as a place where people get stuck rather than get on,” said Fabian Society general secretary Andrew Harrop.
The research also found that young people who entered the job market just before the financial crisis are less likely to progress out of low-paid work than young workers generations before them.
Last year, the TUC asked low-paid young people to keep diaries of their working lives and discovered a pattern – many reported that they have given up on progressing in their jobs.
“Low point: frustrated on not being able to progress at work – reminds me how my company doesn’t care – will leave soon,” wrote one hospitality worker in London.
Another young logistics worker in Birmingham said job progression could only be achieved by “not what you know but who you know,” while an energy worker in Cardiff reported that “unless you play the game” or are “a yes person” then “you won’t progress or be recognised.”
Despite this sense of hopelessness among young people, especially in low-pay sectors such as retail, Unite – along with the Fabian Society and TUC – believe that it doesn’t have to be this way.
The TUC and Fabian Society outlined what both the government and businesses can do to ensure low-paid, dead-end jobs don’t become a permanent reality for a generation of workers who’ve come of age after the financial crisis.
Among these measures is hiking the minimum wage to £10 an hour now and tightening regulation on the labour market, such as banning zero hours contracts – both ideas that Unite and the Labour Party have long backed.
The TUC has also called for stronger rights for workers so that they can collectively bargain for better pay, as well as creating new sector bodies made up of government, employers and trade unions to discuss pay, skills, productivity and progression in industries characterised by low pay.
Harrop pointed out that “improving pay and progression for retail workers can help companies by increasing retention, broadening the pool of talent and improving productivity.
“The retail sector must come together with the government on an industrial strategy with good jobs at its heart,” he said.
TUC general secretary Frances O’Grady warned that “Unless we boost opportunities and pay we risk losing a generation of young workers to dead-end jobs on low pay with no hope of any career progression.”
Unite assistant general secretary Steve Turner said that low-paid work has become a permanent and pervasive way of life for millions thanks to “a decade of failed Tory policies and free market fundamentalism.
“Retail and shop work was once a job of choice for many young people still in education and looking to earn some money working on a Saturday before moving into a career, an apprenticeship or other form of secure, permanent, better paid and full-time work,” he said. “Now more and more people are stuck in jobs for decades that don’t offer security or a career, full-time hours or even enough pay to meet a basic standard of living.”
“This is a result of specific political choices and can just as easily be undone by a government prepared to make different choices – from investment in a growing economy that works for all and the return of sector-level collective bargaining to a serious council house building programme and tax reform that fairly redistributes wealth alongside the banning of zero and short-hours contracts and hiking the minimum wage to a real living wage of £10ph.”
“The solutions are well within our grasp. All that’s required is the political will to take action.”
He joined O’Grady in calling all workers to take part in the TUC’s ‘New Deal for Working People’ march on May 12 in London.
“Workers deserve so much better,” O’Grady said.
Find out more about the TUC march — and how you can book your free transport — here.