LLAKES International conference 5-6 July 2010 Exploring Inequality and its Consequences: Education, Labour Markets, and Communities Skill: the solution to low wage work? Caroline Lloyd and Ken Mayhew ESRC centre on Skills, Knowledge and Organisational Performance (SKOPE) Cardiff University and University of Oxford

Outline Problem of low pay Problem of low pay Labour government’s assumptions about skills and low pay Labour government’s assumptions about skills and low pay Questioning the assumptions: evidence from Russell Sage Foundation project on low wage work Questioning the assumptions: evidence from Russell Sage Foundation project on low wage work –Skill shortages holding firms back –Minimum platform of employability –Progressing out of low wage jobs –Qualifications a protection in the labour market Conclusions Conclusions

Proportion of UK workforce falling below 2/3 median hourly wage, Source: Mason et al 2008

Source: Mason & Salverda 2008 (below 2/3 median hourly wage)

The Assumptions 1. Employers are being held back by lack of skills 2. Level two = ‘minimum platform for employability’ 3. Qualifications = progression 4. Qualification = protection in the labour market

Skills are the answer… The skills of the workforce are a key driver of the productivity of an economy. Improving the skills of individuals enables firms to improve products and processes, to adapt more quickly to changing competitive environments and to increase opportunities for innovation. (HM Treasury Per-Budget Report, 2007:51) ‘By helping people improve their grasp of the basics, we help them develop the platform of skills they need to find, stay and progress in work. We help them to improve their earnings.’ (DIUS Skills for Life: Changing Lives 2009:4)

Job Estimated jobs % female% part- time % earning below 2/3 median pay (£6.59) Call centre agent Food, drink, tobacco processing operative Hotel cleaner (2007/8) Hospital cleaner (2003/4) Nursing auxiliary Retail sales assistant Check-out operative UK Source: Annual Survey of Hours and Earnings 2006, Lloyd et al 2008, People 1 st 2009, UNISON Job characteristics, 2006

Recruitment criteria QualificationsOther Call centre agentGCSEs A-C Maths/English preferred ‘Attitude’ ‘personality’ ‘staying power’ Food processing operative NoneBasic English (some), dexterity tests (some) Hotel room attendantNone Hospital cleanerNone‘Reasonable standard of literacy & numeracy’ Health care assistantGCSEs Maths/English preferred Experience in caring Sales assistants, check-out operative None‘Attitude’, ‘friendliness’, communication skills, basic numeracy and literacy. Electronic product knowledge

Numeracy and literacy demands I suppose you don’t need to be perfect for English, well, not English but maths and everything but as long as you can sort of read ‘Danger’ and don’t walk in front of the [machine] that sort of thing. (Line operative, food processing factory) I mean we have had work experience kids in who have been, I wouldn’t say illiterate but not very literate and they’ve managed … to a certain extent yes they do have to be literate, they just need to be able to read the room numbers to be honest. (Hotel cleaning supervisor)

Under or over-qualified? Majority of workers had few/ no qualifications: process operative, hotel and hospital cleaners Majority of workers had few/ no qualifications: process operative, hotel and hospital cleaners Significantly levels of over-qualification: call centres, hospitals, retail, migrant workers Significantly levels of over-qualification: call centres, hospitals, retail, migrant workers –Call centres: graduates/ A levels etc. (transitory job) –Hospitals, retail: women returners/ students Downward occupational mobility Downward occupational mobility

Progression opportunities Improvements in the NHS: Agenda for Change/ Skills Escalator Improvements in the NHS: Agenda for Change/ Skills Escalator –Increased uptake of NVQ2 and NVQ3 –Link to new intermediate posts, e.g. assistant practitioner –Nurse training secondment –But lack of posts, over demand for nurse training, budget cuts Other jobs: limited opportunity/reduced upward mobility Other jobs: limited opportunity/reduced upward mobility –Supervisor positions but little additional pay (except call centres) –Promotion not linked to qualifications –Rare opportunities for part-timers

Few opportunities I think you’d need to be here a couple of years, you would need to know everything and do everything perfect and all that to get a supervisor’s job… and the girls have been here for years and they’ve not got it… (Room attendant, 4* hotel) 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 case I couldn’t do it. I mean, I have done. I have been all sorts, I have been a trainer, I have been a knife sharpener… I have even been a front line manager. (Female food processing operative aged 43, lowest grade)

Qualifications: a protection in the labour market Lack of labour market power Lack of labour market power Deterioration in the quality of work Deterioration in the quality of work Abundant labour supply (part-time and migrant workers) Abundant labour supply (part-time and migrant workers) Our pay scales [the NMW] are lower [than other local companies] … We tried local, you just can’t get the people. Even if you get the numbers, you can’t get the quality. They will turn up for a couple of days and then won’t bother getting out of bed again so the only way to get reliable agency staff is from abroad. (HR manager, food processing company) Exceptions: Exceptions: NHS – role of the state/ trade unions Call centres – retention problems led to improvements in some aspects of job quality

Conclusion Jobs very simple, easy to learn, Taylorist Jobs very simple, easy to learn, Taylorist Jobs require little training Jobs require little training Abundant labour supply + weak labour market regulation removes constraints & undermines job quality Abundant labour supply + weak labour market regulation removes constraints & undermines job quality Skills not going to solve low wage work Skills not going to solve low wage work Comparative research (eg. Gautié & Schmitt (eds.) 2010 Low Wage Work in the Wealthy World) shows importance of wage setting institutions, eg. collective bargaining coverage, minimum, wages Comparative research (eg. Gautié & Schmitt (eds.) 2010 Low Wage Work in the Wealthy World) shows importance of wage setting institutions, eg. collective bargaining coverage, minimum, wages