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Foundation finds that the low-paid are 'unable to escape'

14 November 2014

by a staff reporter


"Deep repentance": Dr Sentamu 

"Deep repentance": Dr Sentamu 

THREE-QUARTERS of people in low-paid work are unable to escape into higher-paid positions, even after a decade of regular employment, a new report suggests.

Using official data to track low-paid workers throughout the past decade, a study by the think tank Resolution Foundation set out to discover how many progressed into better-paid jobs. Their report, Escape Plan, found that some moved up the income ladder, but they soon slipped back again.

Researchers found that only a quarter managed to escape low pay permanently, and that single parents, older workers, disabled people, and part-time workers were most likely to find it particularly hard to move out of low-paid work.

The chairman of the social poverty and Child Poverty Commission, Alan Milburn MP, said: "The majority of Britain's poorest-paid workers never escape the low-pay trap. Too many simply cycle in and out of low-paying jobs instead of being able to move up the pay ladder. Any sort of work is better than no work, but being in a job does not guarantee a route out of poverty.

"This research provides compelling evidence for employers and Government to do more on pay progression. It is a powerful argument for Britain to become a Living Wage country."

The Archbishop of York, Dr Sentamu, addressed the CBI conference this week, and urged it to embrace the Living Wage. He said: "Britain is at risk of becoming a place where the 'haves' and the 'have nots' live in separate parallel worlds; where the 'Common Good' has become a pious platitude rather than a genuine believable aspiration.

"We must find both the political and economic will to create a society which is fair for all rather than fair for a small few. Income inequality is a stain on all our consciences."

The new Living Wage rate was announced last week. It is now £7.85 an hour - a rise of 2.6 per cent on the 2013 rate, and 21 per cent higher than the national minimum wage. In London, it is £9.15.

Last month, the Resolution Foundation reported that the proportion of employees in low-paid work (defined as two-thirds of median hourly pay: £7.69 an hour) increased from 21 to 22 per cent last year, to 5.2 million. It concluded that the UK had among the highest proportion of full-time low-paid workers across the OECD.

Payday loans to be capped. The Financial Conduct Authority announced a cap on the cost of payday loans this week. The Bishop of Leeds, the Rt Revd Nick Baines, urged people to turn to credit unions instead. Church schools in his diocese have set up savings clubs for children through credit unions.

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