Colloquium on Vulnerable Workers, Centre Colloquium on Vulnerable Workers, Centre for Global Labour Research, Cardifffor Global Labour Research, Cardiff

29 October 2008 29 October 2008

Low PayLow Pay

Caroline LloydCaroline Lloyd

SKOPE/CGLSSKOPE/CGLSSchool of Social SciencesSchool of Social Sciences

Cardiff UniversityCardiff Universitylloydc4@cardiff.ac.uklloydc4@cardiff.ac.uk

Low pay, skills and vulnerable Low pay, skills and vulnerable workersworkers

Trends in low paid work Trends in low paid work

UK policy: skills as the ‘route out of poverty’UK policy: skills as the ‘route out of poverty’

Case study research on low wage jobs and the Case study research on low wage jobs and the potential for progressionpotential for progression

Implications for ‘vulnerable’ workersImplications for ‘vulnerable’ workers

Russell Sage Foundation funded Russell Sage Foundation funded research on low wage work in Europe research on low wage work in Europe

and the USand the US UK team: UK team:

SKOPE – Susan James, Caroline Lloyd, Ken Mayhew, SKOPE – Susan James, Caroline Lloyd, Ken Mayhew, Jonathan Payne + SKOPE associates: Eli Dutton, Chris Jonathan Payne + SKOPE associates: Eli Dutton, Chris Warhurst (Strathclyde)Warhurst (Strathclyde)

NIESR – Geoff Mason, Matt Osborne, + Marilyn Carroll, NIESR – Geoff Mason, Matt Osborne, + Marilyn Carroll, Damian Grimshaw (Manchester)Damian Grimshaw (Manchester)

Low-waged work in the United Kingdom Low-waged work in the United Kingdom (2008) eds Caroline Lloyd, Geoff Mason and (2008) eds Caroline Lloyd, Geoff Mason and Ken MayhewKen Mayhew

Evolution of rate of low-wage employment, %, 1973-2005

Low pay threshold = 2/3 median hourly earnings

6

16

26

1973 1977 1981 1985 1989 1993 1997 2001 2005

US

UK

DE

NL

FR

FRoecd

DK

Source: Mason & Salverda 2008

0

5

10

15

20

25

30

35

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

% e

mp

loye

es b

elo

w lo

w p

ay t

hre

sho

ld

Men Women Total Men Women Total

Proportion of UK workforce falling below LPT, 1975-2006

Source: Mason et al (2008)

UK policyUK policy

‘‘work is the best way out of poverty’, but work is the best way out of poverty’, but – Almost half of the 3 million children in poverty live in Almost half of the 3 million children in poverty live in

households that have a working member (Kenway 2006)households that have a working member (Kenway 2006)– working poor account for 57% of all poor households working poor account for 57% of all poor households

(DWP 2006)(DWP 2006)

skills ‘route out of poverty’ skills ‘route out of poverty’ ‘‘We also know that gaining skills is the best route out of We also know that gaining skills is the best route out of poverty and the best way to provide economic security for poverty and the best way to provide economic security for your family’. (LSC 2007)your family’. (LSC 2007)

– Level 2 = minimum platform of employability (Train to Level 2 = minimum platform of employability (Train to Gain free level 2 in England £500m 2007/08 to over £1b Gain free level 2 in England £500m 2007/08 to over £1b in 2011)in 2011)

– skills are the best protection in the labour marketskills are the best protection in the labour market

Characteristics of selected jobs 2006, UK

Call centre agent

Food Process Operative

Hotel room

attendant

Health care

assistant

Hospital cleaner

Retail sales

assistant

Retail check-out operative

UK

% female 71 29 85 86 90 71 75 46

% part-time

24 13 56 44 66 65 75 25

% below low pay threshold (£6.59)

31 31 89 17 56 72 69 22

No of case studies

8 6 7 7 8 36

Pay: median case (% of UK

median)

Permanent contracts

Positive movement in job quality

Negative movement in job quality

Hotel room attendant

£5.05(53%)

36% to 100% Working time flexibilityMore agency workersLower payWork intensification

Retail: food £5.75(60%)

Majority to 100%

Lower payWorking time flexibility

Retail: electrical

£7.95(83%)

Majority to 100%

Food processing operative

£6.71(70%)

42% to 85% Improved health and safety

Lower payCuts in benefitsMore agency workersWorking time flexibilityWork intensification

Hospital cleaner

£5.602

(59%)Close to

100%Higher payImproved benefits

Work intensification

Health care assistant

£7.282

(76%)Varied up to

100%Higher payImproved progression

Call centre agent

£8.25(86%)

20% to 100% Higher payImproved working hoursFewer agency workers

Case studies: job quality

Recruitment criteria & qualifications held (case studies)

Job Qualifications required in recruitment

Level 2 qualifications (those interviewed)

Hotel room attendant None Some (non-UK), many few/no qualifications

Sales assistants, check-out operative

None 70% (national statistics) level 2+

Food processing operative

None Few, many no qualifications

Hospital cleaner None None, all few/no qualifications

Health care assistant GCSEs Maths/ English preferred

Most, some few/no qualifications

Call centre agent GCSEs A-C Maths/ English

preferred

High proportion, many level 3, level 4

Progression opportunitiesProgression opportunities

Reduced upward mobility Reduced upward mobility

Flat organisational structuresFlat organisational structures

Supervisor positions/ team leaders little additional Supervisor positions/ team leaders little additional paypay

Managers – with degreesManagers – with degrees

Qualifications largely irrelevantQualifications largely irrelevant

Rare opportunities for part-timersRare opportunities for part-timers

Flat organisationsFlat organisations

‘‘I don’t know I think you’d need to be here a couple of I don’t know I think you’d need to be here a couple of years, you would need to know everything and do years, you would need to know everything and do everything perfect and all that to get a supervisor’s job, you everything perfect and all that to get a supervisor’s job, you won’t just come in and the girls have been here for years won’t just come in and the girls have been here for years and they’ve not got it and you just step in I don’t think it and they’ve not got it and you just step in I don’t think it works that way.’ (room attendant, 4* hotel)works that way.’ (room attendant, 4* hotel)

‘‘There are opportunities but because then there are so There are opportunities but because then there are so many people who are desperate to get out of the call many people who are desperate to get out of the call centre, the volume of people that are going for this centre, the volume of people that are going for this [promotion] is absolutely huge so your odds on getting it [promotion] is absolutely huge so your odds on getting it obviously diminish.’ (call centre agent, A levels, 1 year obviously diminish.’ (call centre agent, A levels, 1 year tenure)tenure)

Working timeWorking time

‘‘If I chose to better myself, it would have to be on a full-If I chose to better myself, it would have to be on a full-time basis because they don’t do that part-time in which time basis because they don’t do that part-time in which case I couldn’t do it. I mean, I have done. I have been, I case I couldn’t do it. I mean, I have done. I have been, I have been all sorts, I have been a trainer, I have been a have been all sorts, I have been a trainer, I have been a knife sharpener… I have even been a front line manager.’ knife sharpener… I have even been a front line manager.’ (Female lowest graded operative, CSEs/O levels, food (Female lowest graded operative, CSEs/O levels, food processing factory)processing factory)

‘‘Sections of thirty people can’t run with a part-time Sections of thirty people can’t run with a part-time manager’… ‘what we would require of anyone who wants to manager’… ‘what we would require of anyone who wants to be a section manager is that they must be mobile to at be a section manager is that they must be mobile to at least five stores’ (Retail managers, Mason & Osborne least five stores’ (Retail managers, Mason & Osborne 2008:157)2008:157)

Positive example of Positive example of progressionprogression

NHS Agenda for Change and the Skills NHS Agenda for Change and the Skills EscalatorEscalator• Job ladders improvedJob ladders improved• NVQ2 & 3NVQ2 & 3• New intermediary posts, eg. junior New intermediary posts, eg. junior

doctors’ assistant, assistant practitionerdoctors’ assistant, assistant practitioner• Secondment to nurse trainingSecondment to nurse training

Source: Grimshaw & Carroll 2008

ConclusionConclusion

Vulnerable worker narrows the definition of the Vulnerable worker narrows the definition of the problemproblem

Qualifications in themselves not a lever require Qualifications in themselves not a lever require labour market power, eg. unions, shortageslabour market power, eg. unions, shortages

How to shift from meeting minimum standards to How to shift from meeting minimum standards to raising the bar?raising the bar?

Constraints on low cost routes to Constraints on low cost routes to competitiveness… competitiveness…