Post on 24-May-2015
Supporting low-paid Londoners to progress in work
Tony WilsonCentre for Economic and Social Inclusion
tony.wilson@cesi.org.uk@tonywilsoncesi
The challenge (1)Unprecedented collapse in wages – London and UK
Source: Annual Survey of Hours and Earnings
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
Annual change in median hourly earnings, 2012 constant pricesUK London (residents)
The challenge (2)For first time, most adults in poverty in working
households
Source: Households Below Average Income
01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/120
10
20
30
40
50
60
70
Share of those in relative poverty by economic statusOne or more adults in work No adults in work
The challenge (2)For first time, most adults in poverty in working
households
Source: Households Below Average Income
01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/120
10
20
30
40
50
60
70
Share of those in relative poverty by economic statusOne or more adults in work No adults in work
The challenge (3)Big rise in number in involuntary part-time or temp
work
Source: Labour Force Survey
2002 JAN 2003 JAN 2004 JAN 2005 JAN 2006 JAN 2007 JAN 2008 JAN 2009 JAN 2010 JAN 2011 JAN 2012 JAN 2013 JAN0
500
1000
1500
2000
2500
Number in part-time or temp work because cannot find full-time job
So overall...
Headline economic recovering masks challenges:– Falling earnings– Stagnating living standards– Increasing working poverty– Increasing job insecurity
Ensuring policy and practice supports retention and progression is more important than ever
Key findings – low pay
21% of London workers (625,000 people) paid below LLW
Low pay is becoming more prevalent and entrenched:
Change in employee numbers and median hourly pay for occupations with median hourly pay below LLW, London, 2006–11
Bar staff
Waiters & waitresses
Cleaners & domestics
Sales & retail assistants
Retail cashiers & check-out operators
Labourers (process & plant)
Chefs & cooks
Market research interviewers
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
-10% -5% 0% 5% 10% 15% 20%
Change in e
mplo
yee n
um
bers
Change in median hourly pay
National median change in pay
Rising jobsFalling pay
Rising jobsRising pay
Falling jobsRising pay
Falling jobsFalling pay
Some groups more likely than others to be low paid
Overa
ll
50-6
4 ye
ar o
lds
Fem
ales
Disabl
ed p
eopl
e
BAME gr
oups
Lone
par
ents
16-2
4 ye
ar o
lds
No qu
alifi
catio
ns0%
10%
20%
30%
40%
50%
60%
Proportion in work earning below Living Wage (London)
Also need to look at persistence...
571,000 Londoners ‘stuck’ in low pay for +1 year, 5.4 million people across the UK
164,000 Londoners at risk of cycling between work and low pay, 1.2 million people nationally – especially young people and those with no qualifications
Snapshot of people’s status in the labour market, London and UK, Apr 2012–Mar 2013
912,000 6,913,000
203,000 1,432,000
111,000 733,00054,000 506,000
571,000 5,406,000
2,358,000 17,635,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
London UK
Economically inactive
Unemployed, not worked within past year
Unemployed, having been employed within past year
In employment, earning below living wage, moved from unemployment within past year
In employment for more than one year, earning below living wage
In employment, earning living wage or above
'At risk of cycling'
Figure 3.8: Proportion of low-paid people whose annual hourly wage growth is less than the national median, London and UK
29%
36% 37%
28%
32%30%
32%33%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2006-07 2008-09 2010-11 mid-2011-mid-2013
London UK
Many of the low paid progress more slowly
Wage progression more likely for those starting in low pay (median hourly wage growth of 10% annually)
But around on third of low- paid workers don’t see wage progression:
Changing jobs, and receiving on-the-job training, both seem to matter
Poor progression for different groups:
Overall Females 16-24 year olds BAME groups Disabled people
Lone parents People with no qualifications
0%
10%
20%
30%
40%
50%
60%
70%
Proportion of low paid with hourly wage growth below medianLondon UK
Views from the front line
A number of the unemployed people and low-paid workers we spoke to did not aspire to progress, and were satisfied with current (or previous) jobs
Others felt that the industries they worked in did not present progression opportunities
Salary considered the most important benefit of progression, alongside job satisfaction, confidence and job security:
Focus group participants’ prioritisation of positive aspects of progression
What may work?We looked at four case studies: RCT Homes – the transition into work
– Focus on soft skills through ‘Can Do Toolkit’– ‘Progress Tree’ to support progression
Renovo – staying in work– Work coaches and ‘Workfriend’ – multiple channels, personalised
pwc – retention and progression– Employer ownership pilot– Organisational support, mentoring, focus on SMEs
Stafforce – use of career ladders– Building qualification frameworks into own workforce development
(‘The Academy’)
Also reviewed range of evidence from UK and internationally
All suggests two key factors in our control:
The individual
Effective case management
Training support Financial incentives
The employer
Management and support systems
Staff culture and behaviour
Company factors
Which means...
Supporting people to stick and then stay in work by getting the job match right, personalising support, and supporting people through the transition to work
Supporting people to progress in work by personalising support to the individual’s needs (including job-related training and financial incentives)
Providing the right (business to business) support to employers to grow their workforce and their business
In practice: Targeting:
– Identifying those most at risk – particularly lowest qualified, caring responsibilities, many young people, poor work histories, certain occupations and sectors...
Joining up:– Some opportunity with JCP London, but most of ‘target’ group not on
DWP benefits– Engaging through LEPs, employer networks, local contacts– Joining up across skills, employment, employer engagement
Case management led:– Employee – confidence, motivation, networks, goals, skills– Employer – HR, recruitment and retention, leadership, management
Additional support:– Training – scope to use FE loans?– Brokerage – finding a new job?– Incentives to progress – how??
Questions for discussion
Does this ring true for you?What do you think works?What are the key barriers to going
further or doing more?What don’t we know?How do we take this further?
Supporting low-paid Londoners to progress in work
Tony WilsonCentre for Economic and Social Inclusion
tony.wilson@cesi.org.uk@tonywilsoncesi