300,000 'stuck on minimum wage'

%VIRTUAL-SkimlinksPromo%notes and coins in handMore than 300,000 workers have been stuck on the minimum wage for five years or more, and 90,000 have never earned more than 25p above the minimum wage level since its introduction in 1999, according to a new report.

And the overwhelming majority of those trapped on the lowest rung of the pay ladder are women, who make up almost three-quarters (73%) of those in minimum wage work for five years or more, despite accounting for just 62% of all minimum wage workers.

The report by the Resolution Foundation think tank identified a growing trend for minimum wage employees to split into two groups, the first made up of new entrants to the labour market who swiftly move on to better-paid work, and the second of workers who do not escape low pay for an extended period of time.

The crucial "fork in the road" comes in the mid-30s, after which the chances of remaining trapped in low pay rises sharply. While workers aged between 46 and 55 make up 17% of all those on the minimum wage, some 30% of those trapped there for five years or more are in this age group.

In all, some 320,000 people - 17% of all those currently earning the minimum wage, and including 230,000 women - have not earned more than 25p an hour above the minimum wage in the last five years.

Of those, 140,000 have gone 10 years and 90,000 13 years without earning more than this level. Among those who have only had minimum wage jobs in the last 10 years, almost four in five - 79%, or 110,000 workers - are women.

The national minimum wage was introduced at £3.60 an hour in 1999 and now stands at £6.31 an hour for adult workers, £5.03 for 18-20 year-olds, £3.72 for under-18s and £2.68 for apprentices.

Alex Hurrell, senior analyst at the Resolution Foundation and co-author of the report, said: "Living on the minimum wage is always hard, but at the very least we would hope that minimum wage work is the first rung on the ladder. For a large group of workers it seems that this is not happening. The reality is a cycle of minimum wage jobs and unemployment, with little progression over time."

Conor D'Arcy, Resolution Foundation researcher and co-author, added: "The national minimum wage has succeeded in lifting people out of extreme low pay but beyond that its effects are more mixed. Men, younger workers and those in London appear relatively less likely to have remained on the minimum wage over time, but others - especially women and part-time workers - appear to have been at much higher risk of becoming trapped."

The report's other findings include:
  • Part-time workers are more likely to have remained in minimum wage work. They make up 62% of all minimum wage workers but 77% of those stuck at that level for 10 years or more.
  • Remaining in the same job or occupation is associated with remaining on the minimum wage.
  • London's low-wage labour markets appear to be more dynamic. The region contains 9% of all minimum wage workers but only 4% of those earning it for five years or more.
  • The wholesale and retail sector has relatively high levels of employees trapped at minimum wage. Some 37% of long-term minimum wage earners work in this sector.

© 2013 Press Association
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