Cost of living crisis: UK's high earners more insecure than those on low pay

Higher paid workers see change in the labour market as risky. Photo: Justin Tallis/AFP via Getty Images
Higher paid workers see change in the labour market as risky. Photo: Justin Tallis/AFP via Getty

Workers in the top pay bracket in the UK are more concerned about changes in the labour market compared to those who earn lower wages, a study suggests.

Analysis published on Wednesday from the Resolution Foundation found higher earners are more fearful of moving or losing jobs than low earners.

This was due to worries about getting less pay and flexibility when they find new jobs, while low-earners often see little benefit from upending the status quo, the report said.

In its Listen Up report for The Economy 2030 Inquiry, a collaboration with the LSE, funded by Nuffield Foundation, the think tank examined how the economy and changes in the labour markets affect workers amid a cost of living crisis.

High work intensity and bad management were identified as the main negatives at work.

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Higher earners saw change in the labour market as risky, identifying the challenges of finding equally well-paid work, and losing the "flexibility earned" from current employers, according to the research.

Respondents were also fearful of unemployment amid worries around a lack of support from the government during any period out of work.

In contrast, low earners were less worried about the prospect of losing their job, seeing their skills as transferrable, and feeling that it was easy to find new work.

The foundation said that this view likely reflects the fact that the current labour market is tight, with vacancies currently at record highs.

"This report gives much-needed voice to people who are not often heard in economic debate. It highlights how people’s lives are about so much more than work and spending, including the importance of family and community, and the contributions that so many make to society," said Alex Beer, welfare programme head at the Nuffield Foundation.

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"However, bad management, limited autonomy at work and rising costs are all detrimental to people’s quality of life and have implications for the successful functioning of the UK economy.

"Better management practices, training opportunities, an improved social security safety net and regulation in product and labour markets could all make a difference."

Despite this, employees reported little incentive to actively find new work as they expected jobs to be "more-of-the-same" in terms of levels of pay, work intensity and insecurity.

The financial gains from moving jobs were seen as too small, and the financial cost of undertaking training to enable them to find better paid work was too high.

The Foundation notes that the reluctance to move jobs is hugely problematic as the lack of job mobility can stunt the careers of higher earners, especially younger workers.

The think tank highlighted that low-earners, even those who found themselves trapped in an unsatisfying low pay, high insecurity working environment, still felt little incentive to escape it.

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Karl Handscomb, senior economist at the Resolution Foundation, said: "The big takeaway from our research is that people value work in far richer ways than simply their pay cheque.

"Choice was acknowledged as important to get better value for money, and to actively participate in wider society. But people warned that when money was tight, their life choices were limited.

"This suggests the cost of living crisis could have a wider impact on families than just their personal finances."

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