It finds that around one third of low-paid workers see their wages increase by less than the national average, pointing to challenges with Universal Credit as its successful implementation depends on over a million low-paid workers increasing their earnings. Other key findings include:
- There are 14 occupations in London where a majority of staff are paid below the Living Wage – including sales staff, bar staff, waiters and labourers.
- All but two of these occupations have seen below average pay growth over the last five years.
- At the same time, employment in low paying occupations has grown – in some cases by more than a third. Low pay appears to be becoming more prevalent and entrenched.
- Low-paid young Londoners are more than twice as likely to see below average pay rises as low-paid young people in the UK as a whole.
- A survey of one hundred employment and skills providers finds that there is virtually no support from mainstream programmes to help low-paid workers progress – despite two-thirds of providers considering it to be very important or fundamental to participants
There is emerging evidence of what works in improving pay and progression:
- Low-paid workers receiving training on the job see their pay increase by 13% on average – two-thirds higher than those that don’t (8%)
- Supporting people to stay in work – through mentoring, personalised support and financial incentives – as has been shown in programmes in Canada and the United States
- ‘Business to business’ help for employers to retain and grow their workforce – as is being trialed through the new ‘Employer Ownership of Skills’ pilots
- Building career ladders within industries.
Recommendations from the report include:
- Unlocking the £2 billion Adult Skills Budget – with eligibility for full funding for Level 2 training extended to those in work and identified as most at risk of low pay and poor progression. Currently this funding cannot be spent on supporting low-paid workers.
- The development of a new ‘Employment Plus’ model, that combines support to find work, stay in work and progress in work. This approach should be incorporated into any successor to the Government’s Work Programme.
- London should take the lead in developing this model – through Jobcentre Plus as a starting point.
- An open source Innovation Fund to rigorously test new approaches to improving retention and progression, evaluate them and share the results.
- That London should develop its own framework to test and evaluate progression, within its existing contracts and programmes.