Photographer: Simon Dawson/Bloomberg
economics

Millions of Britons Are Trapped in Low Pay, Think Tank Warns

  • Higher minimum wage has helped but other policies are needed
  • Resolution Foundation says few sales assistants become bosses

The proportion of British workers in low-paid jobs fell to a 35-year low last year but there is no room for complacency, a think tank warned.

The Resolution Foundation said 18 percent of employees earned less than two thirds of the median hourly wage and the number in low pay dipped below 5 million for the first time since 2003, thanks to the introduction of a higher minimum wage.

Coming Down

The minimum wage has boosted pay for millions but more needs to be done

Source: Resolution Foundation

Note: Two-thirds of median earnings is the equivalent of 8.50 pounds today. The compulsory minimum wage currently stands at 7.83 pounds

But in a report Friday, the foundation said low pay still dominates sectors such as hospitality and warned that many people face a struggle to move into better-compensated jobs.

“Workers today too often find themselves stuck on the shop floor with no chance to move up the ladder,” said Conor D’Arcy, senior policy analyst at the London-based research firm. “Many are employed by one of a handful of big hiring, but low paying, firms in an industry or local area with few other options available. Women remain far more likely to be trapped in low pay than men.”

The foundation said 4 million people are still projected to be in low pay by the end of the decade, showing that policy makers need to look beyond the minimum wage for solutions. Around one in four workers in the northern cites of Sheffield and Nottingham earn less than 8.50 pounds ($11.50) an hour, it said.

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