Progress | Centre-left Labour politics

When the living wage is not enough

The very need for ‘Living Wage Week’ at the beginning of November highlighted the distorted nature of a labour market allegedly ‘on the up’. The best-paid group are on 3.7 times the pay of the bottom 10 per cent. This compares with a ratio of 3.5 in 2000 and equates to a five per cent rise in inequality. But the majority of employers with low paid staff are failing to pay a living wage that would at least in part address this rise.

Labour’s announcement in September of an increase in the minimum wage next year if elected to £8 per hour would force these recalcitrant firms to act where voluntarism seems be failing. However, low pay is only part of the challenge. Low-paid jobs are not going to go away. In the 2000s Labour bought heavily into the idea that investment in education would lead to a knowledge based economy and the fading away of low skilled work. But the evidence shows that low skilled jobs are increasing in number. Over 20 per cent of jobs in the United Kingdom require only primary education. These include the majority of those in childcare, which despite its alleged importance has extremely low entry requirements, and much of the increasingly casualised retail and catering sectors. Increasingly the economy overall is coming to resemble an hourglass with the bottom of it growing larger than the top. Neither is low paid work a transitory phase confined to the young or the old. Nearly half of those earning less than two-thirds of the median wage are aged from 31-60.

It may be time to go beyond the living wage where low-skilled work is concerned and think how we can improve the working experience for the millions who will remain in such jobs for a long time and develop the idea of  the ‘living career’. This means doing more than ensuring that everyone in employment have an income that allows them to participate in society, but they also have the opportunities in their working life that those in higher paid jobs come to expect by right. These opportunities include better conditions and security reducing zero-hours contracts but the ‘living career’ goes beyond this. It means enabling all employees to develop the job they do in such a way that enables them to be creative, autonomous and utilise the skill and potential they have. This would mean in practice, a systematic review of low skilled occupations by government led by employees themselves to identify how their work can be improved which can highlight the business case for employee empowerment. Employers would then need to be encouraged and incentivised to put in place not just staff development and progression opportunities but the workplace practices that on a day-to-day basis unlock the potential of all their workforce.

We are doing poorly in the UK not just in the numbers of low-paid workers we have, but in how we utilise their skill. It is no coincidence that research on jobs satisfaction released earlier this year showed that the majority of the least satisfied workers were in what we define as low skilled jobs. There is skill in all work, even that which commands lower wages, and we need to recognize this as the basis for giving those who do this work respect and dignity.

Work for those in the well-paid, professional part of the economy is about more than just money. Work for those in the lesser-paid parts of it should be too.


Graeme Atherton is director of the National Education Opportunities Network. He is writing here in a personal capacity and is a member of Progress.


Photo: DesertMonsterBell

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Graeme Atherton

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