The Work Foundation last week published its final report on the future prospects for low paid workers (defined as those earning less than £15,000). It has recommended that the government set out a strategic framework for a coordinated low pay strategy for the UK.

The study - Rising to the Challenge: a policy agenda to tackle low pay - found that low pay now affects a staggering 5.1 million employees (21 per cent) of the workforce in the UK and that over a quarter of low-paid workers have remained stuck in low pay for over a decade.

The research organisation’s report also found that policies such as the National Minimum Wage (NMW) have not resolved the issue of low pay because the rate has remained below the low pay threshold and has had limited “ripple” effects further up the wage distribution.

Recommendations made

The study made the following recommendations:

  • The Low Pay Commission (LPC) should be given a wider remit to reduce the proportion of the workforce in low pay to a level close to the OECD average (currently 17 per cent)
  • The LPC should seek to increase the NMW at a faster rate than average earnings over the next few years, given the strength of the recovery
  • The government should set best practice by having its departments and local authorities aiming to become Living Wage employers
    FTSE companies should be required to publish the proportion of their staff paid below the Living Wage as a way of encouraging businesses to be clear about justifying decisions on pay
  • The Adult Skills budget should be expanded to enable the National Careers Service to target skills funding for those in low wage work
    The work of some Local Enterprise Partnerships should be built on in order to place greater emphasis within local growth strategies on building employer demand for skills and supporting business to move up the value chain to grow the number of ‘good jobs’
  • HR support for SMEs should be strengthened to offer advice and guidance on job design and HR practices to better manage and support low-paid staff
  • Better awareness and enforcement of employment rights such as the government’s proposed ban on zero hours exclusivity clauses and Labour’s recommendation for those working consistent hours to be offered a permanent contract.

Jo Seery from Thompsons Solicitors commented: “It is clear that low wages are a product of this government’s policies, which have seen an increase in part time and temporary employment. This report shows that a strategy to tackle low pay includes not only measures to address wage floors, such as the living wage campaign, but also employers’ attitudes and practices, and workers’ rights to security of employment and skills training. Unions clearly have a key role to play in developing a low pay strategy with employers.”

The paper was supported by Barrow Cadbury Trust, Impetus-Private Equity Foundation, The Tudor Trust and Working Links.

To access the full report, go to: