Latest News / Think tank reports biggest fall in low pay for four decades

Think tank reports biggest fall in low pay for four decades

The national living wage helped cut the number of workers on low pay by more than 300,000 last year rather than being a "jobs-killing disaster" as some had warned, a new report reveals.

The country witnessed the biggest year-on-year fall in low pay since 1977, but the UK is still too reliant on low-paid work, the Resolution Foundation said.

The share of workers on low pay - defined as less than two-thirds the median hourly wage - has fallen below one in five for the first time since the 1980s, the think tank said.

Women make up 61% of of low-paid workers, little changed over the last few years.

The study showed regional variations, with Yorkshire and the Humber and the East Midlands having the highest share of low paid employees at 24%, compared to 10% in London.

Conor D'Arcy, senior policy analyst at the Resolution Foundation, said: "Many people warned that the national living wage would be a jobs-killing disaster.

"It's early days still but the result so far has been the biggest fall in low pay for four decades, in an economy where employment is at a record high.

“While it’s important to celebrate the national living wage as a bold, positive policy action, we shouldn’t get complacent.

“As well as the challenges it presents to some employers, over four million workers are still expected to be in low pay by 2020, and the old problems of women and part-time workers being far more likely to be low paid than men remain.

“The Government must continue to work closely with employers to monitor any specific challenges arising from the ramping up of the national living wage, as well as continuing to tackle illegal non-payment.”

A Business Department spokesman said: “The national living wage has delivered the fastest pay rise for the lowest earners in 20 years and they will continue to see their pay go up, with the rate set to increase to 60% of median earnings by 2020.

“But we want to go further by creating good quality jobs for all through our modern Industrial Strategy, boosting earning power and improving living standards across the country.”

PA Wire