Fall in number of workers on low pay, study suggests

The national living wage has 'transformed Britain's low pay landscape'
The national living wage has 'transformed Britain's low pay landscape'
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The proportion of low-paid workers in Britain has fallen to its lowest level since 1980, and low pay could be eliminated altogether by the middle of the 2020s, a new report predicts.

Research by the Resolution Foundation suggested that the introduction of the national living wage three years ago had “significantly” reduced low pay - from 20.7% of the workforce in 2015 to 17.1% last year.

The number of low-paid workers fell by almost 200,000 last year, including more than 130,000 women and 120,000 people aged 21-30, said the report.

The biggest falls were said to have taken place in administrative and support services, and retail, where the number of low-paid workers fell by 110,000 in total.

The think-tank said raising the living wage to a level which would end low pay - by setting it at two-thirds of median hourly earnings for workers aged 25 and over - would represent a further “huge change” to the labour market.

Nye Cominetti, of the Resolution Foundation, said: “The national living wage has transformed Britain’s low pay landscape, with the number of low-paid workers falling by 200,000 in the last year alone.

“Women and young people have been the main beneficiaries of a higher minimum wage, whose ratcheting up has not stopped employment rising to a record high.

“It’s great that both main parties want to go even further on raising the minimum wage and eliminate low pay altogether, but such an ambitious move would transform the labour market, and must therefore be approached boldly but cautiously.

“An ambitious but cautious approach that saw the national living wage continue to rise after 2020 - at a faster pace than the minimum wage has increased over its 20-year history - would put Britain on course to eliminate low pay in the middle of the 2020s, while still giving the Government room for manoeuvre if economic conditions change.”

Katherine Chapman, director of the Living Wage Foundation, said: “It’s positive to see some measures of low pay fall, but there are still around six million jobs paying less than the real living wage - the only rate that’s calculated based on what it costs to live.

“That’s millions of families struggling to keep their heads above water, squeezed by rising household bills.

“To tackle in-work poverty we need to see more businesses join the over 5,000 living wage employers that have already committed to pay a wage that covers the cost of living.”