Colloquium on Vulnerable Workers, Centre for Global Labour Research, Cardiff 29 October 2008 Low Pay Caroline Lloyd SKOPE/CGLS School of Social Sciences Cardiff University

Low pay, skills and vulnerable workers 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 potential for progression Case study research on low wage jobs and the potential for progression Implications for vulnerable workers Implications for vulnerable workers

Russell Sage Foundation funded research on low wage work in Europe and the US UK team: UK team: SKOPE – Susan James, Caroline Lloyd, Ken Mayhew, Jonathan Payne + SKOPE associates: Eli Dutton, Chris Warhurst (Strathclyde) NIESR – Geoff Mason, Matt Osborne, + Marilyn Carroll, Damian Grimshaw (Manchester) Low-waged work in the United Kingdom (2008) eds Caroline Lloyd, Geoff Mason and Ken Mayhew

Evolution of rate of low-wage employment, %, Low pay threshold = 2/3 median hourly earnings Source: Mason & Salverda 2008

Proportion of UK workforce falling below LPT, Source: Mason et al (2008)

UK 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 households that have a working member (Kenway 2006) –working poor account for 57% of all poor households (DWP 2006) skills route out of poverty skills route out of poverty We also know that gaining skills is the best route out of poverty and the best way to provide economic security for your family. (LSC 2007) –Level 2 = minimum platform of employability (Train to Gain free level 2 in England £500m 2007/08 to over £1b in 2011) –skills 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 % part- time % below low pay threshold (£6.59) No of case studies

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 flexibility More agency workers Lower pay Work intensification Retail: food£5.75 (60%) Majority to 100% Lower pay Working time flexibility Retail: electrical £7.95 (83%) Majority to 100% Food processing operative £6.71 (70%) 42% to 85%Improved health and safety Lower pay Cuts in benefits More agency workers Working time flexibility Work intensification Hospital cleaner £ (59%) Close to 100% Higher pay Improved benefits Work intensification Health care assistant £ (76%) Varied up to 100% Higher pay Improved progression Call centre agent £8.25 (86%) 20% to 100%Higher pay Improved working hours Fewer agency workers Case studies: job quality

Recruitment criteria & qualifications held (case studies) Job Qualifications required in recruitment Level 2 qualifications (those interviewed) Hotel room attendantNone 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 cleanerNone 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 opportunities Reduced upward mobility Reduced upward mobility Flat organisational structures Flat organisational structures Supervisor positions/ team leaders little additional pay Supervisor positions/ team leaders little additional pay Managers – with degrees Managers – with degrees Qualifications largely irrelevant Qualifications largely irrelevant Rare opportunities for part-timers Rare opportunities for part-timers

Flat organisations I dont know I think youd need to be here a couple of years, you would need to know everything and do everything perfect and all that to get a supervisors job, you wont just come in and the girls have been here for years and theyve not got it and you just step in I dont think it works that way. (room attendant, 4* hotel) There are opportunities but because then there are so many people who are desperate to get out of the call centre, the volume of people that are going for this [promotion] is absolutely huge so your odds on getting it obviously diminish. (call centre agent, A levels, 1 year tenure) There are opportunities but because then there are so many people who are desperate to get out of the call centre, the volume of people that are going for this [promotion] is absolutely huge so your odds on getting it obviously diminish. (call centre agent, A levels, 1 year tenure)

Working time If I chose to better myself, it would have to be on a full-time basis because they dont do that part-time in which case I couldnt do it. I mean, I have done. I have been, 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 lowest graded operative, CSEs/O levels, food processing factory) Sections of thirty people cant run with a part-time manager… what we would require of anyone who wants to be a section manager is that they must be mobile to at least five stores (Retail managers, Mason & Osborne 2008:157)

Positive example of progression NHS Agenda for Change and the Skills Escalator Job ladders improvedJob ladders improved NVQ2 & 3NVQ2 & 3 New intermediary posts, eg. junior doctors assistant, assistant practitionerNew intermediary posts, eg. junior doctors assistant, assistant practitioner Secondment to nurse trainingSecondment to nurse training Source: Grimshaw & Carroll 2008

Conclusion Vulnerable worker narrows the definition of the problem Vulnerable worker narrows the definition of the problem Qualifications in themselves not a lever require labour market power, eg. unions, shortages Qualifications in themselves not a lever require labour market power, eg. unions, shortages How to shift from meeting minimum standards to raising the bar? How to shift from meeting minimum standards to raising the bar? Constraints on low cost routes to competitiveness… Constraints on low cost routes to competitiveness…