Close to eighty per cent of net job creation since June 2010 has taken place in industries where the average wage is less than £7.95 an hour, according to new TUC analysis.
The UK’s Low Pay Recovery finds that of a 598,000 net rise in employee jobs across high and low paid sectors since June 2010, 77 per cent are in low-paid industries, such as retail, waitressing and residential care.
The TUC analysis of official figures looks at the number of employee jobs by industry. It then uses median average hourly earnings in each industry to classify whether employees are low, middle or highly paid.
Low-paid industries are defined as those where the average hourly wage is £7.95 or lower (the 25th percentile of average hourly earnings). In high-paid industries, the average hourly wage is £17.40 or higher (the 75th percentile of average hourly earnings).
Retail has made the biggest contribution to rising employment levels, with the number of employee jobs in this sector increasing by 234,000. The average wage in retail is just £7.35 an hour. Residential care, where the average wage is £7.78 per hour, makes the second biggest contribution of 155,000 jobs.
Just over one in five (23 per cent) net new employee jobs created since June 2010 has been in the highly paid computer programming, consultancy and related services industry, where the average hourly wage is £18.40. The workforce in this sector has grown by 131,000.
In middle-paid industries, which account for nearly three-quarters of the UK workforce and where the average wage is between £7.95 and £17.40 per hour, there has been no net job creation since June 2010. While some industries, such as legal and accounting have created jobs (135,000), others such as public administration (-160,000) and social work (-68,000) have shed them.
The government has frequently boasted about record employment levels – ignoring the fact that people’s job chances are still far lower today than they were before the recession. But the TUC is concerned that the overwhelming majority of new jobs have been created in low-paid sectors, with many workers having to take a big drop in their salaries and stall their careers in order to stay in work.
The research also shows how low, middle and high-paid sectors were affected by the recession. Low-paid industries experienced the sharpest jobs decline during the recession – with the number of jobs falling by 3.4 per cent between December 2007 and June 2009. However, employee job numbers have since rebounded and currently stand at a record 6.4 million.
High-paid industries were hardly affected by the recession, with the number of jobs falling by just 0.9 per cent. There are now a record 900,000 employee jobs in high-paid sectors.
However, the number of jobs in middle-paid sectors fell sharply between August 2008 and April 2010 and has struggled to recover since.
TUC General Secretary Frances O’Grady said: ‘The government frequently boasts about record levels of employment, even though people’s job chances have fallen in recent months.
‘But what’s more concerning is that four in five new jobs are in industries where the average wage is less than £8 an hour.
‘One of the unreported struggles of recent years has been people being made redundant from middle-income jobs and having to take low-paid, low-skill jobs as it’s the only work available.
‘Many people who are forced into low-paid work are not only having to take a massive financial hit, but are also having to put their careers on hold. This trading down of jobs can also push those with lower skills and less experience, particularly young people, out of work altogether. This is tough for workers and damaging for the wider economy.
‘Well paid, highly skilled jobs need to be at the heart of our recovery but this won’t happen without government intervention to get our economy growing. We need a proper industrial policy to support growth in key sectors from high value manufacturing and renewable energy, to the creative industries.’
