Thu, 17 Jul 2014The UK still lacks an effective strategy for dealing with the challenge of low-paid work despite the positive signs of growth in the economy, according to a report released today.

The Work Foundation at Lancaster University said that to have a meaningful impact any low-pay strategy must include policies on wages, skills and productivity in low-wage sectors, and recommends action on three fronts

• raising wage floors
• enabling progression
• facilitating higher wage business models.

 
The report authors highlight that low pay now affects 5.1m employees (21%) of the workforce in the UK and that over a quarter of low-paid workers remained stuck in low pay for over a decade.

It goes on to reveal that policies such as the National Minimum Wage aren’t a panacea for low pay. The NMW has a minimal impact on low-wage work because the rate remains below the low-pay threshold and it has had limited ‘ripple’ effects further up the wage distribution.

The main recommendations include:

• The Low Pay Commission (LPC) should be given a wider remit to reduce the proportion of the workforce in low pay (currently at 21%) to a level close to the OECD average (17%)
• Government setting best practice by having its departments and local authorities aiming to become Living Wage employers
• FTSE companies being required to publish the proportion of staff paid below the Living Wage
• Building on the work of some Local Enterprise Partnerships, to place greater emphasis within local growth strategies on building employer demand for skills and supporting business to move up the value chain to grow the number of ‘good jobs’
• Strengthening HR support for SMEs to offer advice and guidance on job design and HR practices to better manage and support low-paid staff.

‘Rising to the Challenge: A Policy Agenda to tackle Low Pay’ by The Work Foundation, Lancaster University, was published today.