Shrinking labour market trapping workers in low paid jobs
A rapid decline in mid-wage jobs is forcing many people to compete for low-wage work, risking waning social mobility as workers often get stuck on low salaries, according to a report published by The Work Foundation.
Mid-wage workers who were once employed in, for example, office administration or factory assembly roles, are being left with little option but to take on lower-waged, lower-skilled work as domestic cleaners, food service handlers or customer service advisors.
The Work Foundation research reveals that office administration and secretarial posts, which have traditionally been dominated by women, have been declining over the past ten years. This is in contrast to lower-waged ‘caring service’ occupations which are on the rise. Meanwhile, middle-waged roles such as plant processing and metal machinist jobs, which tend to be dominated by men, are disappearing due to technological advances. The middle of the job market has been squeezed for over a decade, with strong growth in professional employment and in some lower paying jobs. These changes have caused the labour market to become increasingly hourglass- shaped as the middle continues to hollow out.
Dr Paul Sissons, researcher at The Work Foundation and author of The Hourglass and the Escalator: Labour market change and mobility, said: “In the recession and early recovery, high- and low-waged occupations have faired better. Those losing middle-skilled jobs and ‘bumping down’ into lower-wage work can experience both a loss of income and an under-utilisation of skills. It is also the case that workers who move into low-wage work often find it difficult to move up the career ladder. While for those with the fewest skills, the increased competition for low-wage jobs means many struggle to find employment at all.
“Given that low-waged, low-skilled jobs are an enduring feature of the labour market, boosting the potential for in-work social mobility should be a priority for policymakers. The government should focus on encouraging employers to develop career ladders for employees, and to support the long-term learning needs of workers so they can progress in their careers.”
Dr Neil Lee, senior economist at The Work Foundation, said: “Politicians are very concerned about the squeezed middle and high costs erode mid-level incomes even further. But our research suggests they will increasingly need to consider the ‘shrinking middle’, as mid-level jobs continue to disappear.”
This paper is the second in a series of publications from The Work Foundation’s Bottom Ten Million research programme which focuses on the employment prospects of Britain’s low earners between now and 2020.
The Work Foundation, the leading independent authority on work and its future, was acquired by Lancaster University in 2010.