08.01.09

Improving Skill Levels Will Not Tackle Low Pay Issue Warns IPPR

A new report warns the Government’s current focus on improving the skills of the workforce will do little to reduce levels of low pay unless it is complemented by improvements in investment, innovation, and the use of higher skills by businesses.

The report* published by the ippr, highlights the failure of the Government’s current approach to tackling low pay and in-work poverty.

The ippr points out that the supply of workforce skills appears to have outpaced the growth in demand from the 1980s. In 2006, there were 2.5 million economically active adults with no qualifications, but 7.4 million jobs requiring no qualifications for entry. By 2020, there are projected to be just 585,000 economically active adults with no qualifications – but a similar number of jobs as in 2006 requiring no entry qualifications.

The report recommends a number of reforms to improve opportunities for the low paid and working poor, including:

  • Stronger career ladders within industry sectors to help low-wage workers move up
  • A National Programme for Workplace Performance to help businesses improve performance and productivity, and drive up their demand for high wage, high skill workers
  • Better access to higher level qualifications for low paid workers
  • A tailored package of in-work support for vulnerable workers – including lone parents and disabled people – to help them stay in-work and progress
  • Better information for jobseekers and workers about pay and career prospects in different sectors, occupations and places, to help people make informed employment choices
  • A commitment from welfare to work providers that work will lift a family out of poverty within a reasonable period of time

Commenting on the report, ippr Co-Director, Lisa Harker, said:

“Low pay and in-work poverty are long-term challenges, and the Government must not let its priorities get blown off course by the recession. Although unemployment looks set to rise dramatically over the next 12 months, we should not forget the millions of low paid workers doing vital work across the country.

“If Government is serious about creating a fairer, more socially mobile society and tackling child poverty it must start planning now for an economic recovery which helps Britain’s lowest paid and in-work poor.

“Government investment is needed now to strengthen career ladders, improve workplace performance and make sure the welfare system is focused on helping people stay and progress in work. This will ensure that Britain’s workforce is prepared for the recovery.”

* ‘Nice Work If You Can Get It: Achieving a sustainable solution to low pay and in-work poverty.’

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