Transcript Slide 1

LLAKES International conference 5-6 July 2010
Exploring Inequality and its Consequences: Education, Labour
Markets, and Communities
Skill: the solution to low
wage work?
Caroline Lloyd and Ken Mayhew
ESRC centre on Skills, Knowledge and Organisational
Performance (SKOPE)
Cardiff University and University of Oxford
Outline

Problem of low pay

Labour government’s assumptions about skills and low
pay

Questioning the assumptions: evidence from Russell
Sage Foundation project on low wage work
–
–
–
–

Skill shortages holding firms back
Minimum platform of employability
Progressing out of low wage jobs
Qualifications a protection in the labour market
Conclusions
Proportion of UK workforce falling below 2/3 median
hourly wage, 1975-2006
% employees below low pay threshold
35
30
25
20
15
10
5
0
1975
1977
Men
1979
1981
1983
Women
1985
1987
Total
1989
1991
Men
1993
1995
Women
1997
1999
2001
2003
2005
Total
Source: Mason et al 2008
INCIDENCE OF LOW PAY, % OF EMPLOYEES, 1973-2005 (below 2/3 median hourly wage)
26
US
UK
DE
NL
16
FR
FR
oecd
DK
6
1973
1977
1981
1985
1989
1993
1997
2001
2005
Source: Mason & Salverda 2008
The Assumptions
1.
Employers are being held back by lack of
skills
2.
Level two = ‘minimum platform for
employability’
3.
Qualifications = progression
4.
Qualification = protection in the labour
market
Skills are the answer…
The skills of the workforce are a key driver of the
productivity of an economy. Improving the skills of
individuals enables firms to improve products and
processes, to adapt more quickly to changing competitive
environments and to increase opportunities for innovation.
(HM Treasury Per-Budget Report, 2007:51)
‘By helping people improve their grasp of the basics, we
help them develop the platform of skills they need to find,
stay and progress in work. We help them to improve their
earnings.’ (DIUS Skills for Life: Changing Lives 2009:4)
Job characteristics, 2006
Estimated
jobs
% female
% parttime
% earning below
2/3 median pay
(£6.59)
Call centre agent
742 000
71
24
31
Food, drink,
tobacco processing
operative
173 000
29
13
31
Hotel cleaner
25 900
(2007/8)
85
56
89
Hospital cleaner
55 000
(2003/4)
90
66
56
Nursing auxiliary
227 000
86
44
17
Retail sales
assistant
1 179 000
71
65
72
Check-out operative
147 000
75
75
69
46
25
22
Job
UK
Source: Annual Survey of Hours and Earnings 2006, Lloyd et al 2008, People 1 st 2009, UNISON 2009.
Recruitment criteria
Qualifications
Other
Call centre agent
GCSEs A-C
Maths/English
preferred
‘Attitude’ ‘personality’ ‘staying power’
Food processing
operative
None
Basic English (some), dexterity tests (some)
Hotel room attendant None
None
Hospital cleaner
None
‘Reasonable standard of literacy & numeracy’
Health care assistant
GCSEs
Maths/English
preferred
Experience in caring
Sales assistants,
check-out operative
None
‘Attitude’, ‘friendliness’, communication skills,
basic numeracy and literacy.
Electronic product knowledge
Numeracy and literacy demands
I suppose you don’t need to be perfect for English, well, not English
but maths and everything but as long as you can sort of read
‘Danger’ and don’t walk in front of the [machine] that sort of thing.
(Line operative, food processing factory)
I mean we have had work experience kids in who have been, I
wouldn’t say illiterate but not very literate and they’ve managed …
to a certain extent yes they do have to be literate, they just need to
be able to read the room numbers to be honest. (Hotel cleaning
supervisor)
Under or over-qualified?

Majority of workers had few/ no qualifications:
process operative, hotel and hospital cleaners

Significantly levels of over-qualification: call
centres, hospitals, retail, migrant workers
– Call centres: graduates/ A levels etc. (transitory job)
– Hospitals, retail: women returners/ students

Downward occupational mobility
Progression opportunities

Improvements in the NHS: Agenda for Change/ Skills Escalator
– Increased uptake of NVQ2 and NVQ3
– Link to new intermediate posts, e.g. assistant practitioner
– Nurse training secondment
– But lack of posts, over demand for nurse training, budget cuts

Other jobs: limited opportunity/reduced upward mobility
– Supervisor positions but little additional pay (except call centres)
– Promotion not linked to qualifications
– Rare opportunities for part-timers
Few opportunities
I think you’d need to be here a couple of years, you would
need to know everything and do everything perfect and all
that to get a supervisor’s job… and the girls have been here
for years and they’ve not got it… (Room attendant, 4* hotel)
If I chose to better myself, it would have to be on a full-time
basis because they don’t do that part-time in which case I
couldn’t do it. I mean, I have done. I have been all sorts, I
have been a trainer, I have been a knife sharpener… I have
even been a front line manager. (Female food processing
operative aged 43, lowest grade)
Qualifications: a protection in the labour
market

Lack of labour market power

Deterioration in the quality of work

Abundant labour supply (part-time and migrant workers)
Our pay scales [the NMW] are lower [than other local companies] … We
tried local, you just can’t get the people. Even if you get the numbers, you
can’t get the quality. They will turn up for a couple of days and then won’t
bother getting out of bed again so the only way to get reliable agency staff
is from abroad. (HR manager, food processing company)

Exceptions:
NHS – role of the state/ trade unions
Call centres – retention problems led to improvements in some aspects of
job quality
Conclusion

Jobs very simple, easy to learn, Taylorist

Jobs require little training

Abundant labour supply + weak labour market
regulation removes constraints & undermines job quality

Skills not going to solve low wage work

Comparative research (eg. Gautié & Schmitt (eds.) 2010
Low Wage Work in the Wealthy World) shows
importance of wage setting institutions, eg. collective
bargaining coverage, minimum, wages