Most Of The Jobs Created Under The Coalition Are Low Paid, Says TUC Study

'Osborne's Any-Job-Will-Do Recovery'
Shadow Chancellor George Osborne unveils the new Conservative Party campaign poster outside the Tory HQ in London.
Shadow Chancellor George Osborne unveils the new Conservative Party campaign poster outside the Tory HQ in London.

George Osborne’s economic stewardship has come under fire after evidence emerged that most of the jobs created since the coalition began have been on poor wages.

Out of the 587,000 net rise in jobs created since June 2010, roughly four in five were in industries with average wages of less than £7.95 per hour, like retail, waitressing and residential care. The "living wage", the estimated salary for a worker to meet basic needs, is £7.45 per hour outside of London and £8.55 per hour in London. But the legal minimum is £6.55 per hour.

The sobering findings come from the latest analysis published by the TUC as part of their report "The UK's Low Pay Recovery".

Politicians have pointed to the news as proof that the coalition's strategy for an economic recovery "isn't working".

Speaking to the Huffington Post UK, Sheila Gilmore, Labour member of the Commons Work and Pensions committee, said: "It's been confirming for some time what we’ve been saying that a lot of the jobs are either part-time or low paid to the extent that they’re not getting out of the cycle of low income.

"The recovery isn’t working as the government is suggesting. In human terms, it’s leaving a lot of people struggling to make what they need to pay the bills."

Green Party leader Natalie Bennett said: "The results of the TUC survey will come as no surprise to the many workers struggling with the realities of today's job market. Low pay, casual hours even for those who are looking for a full-time post, and zero-hours contracts are like a disease spreading through our labour market."

According to the TUC research, the retail sector comprises the biggest part (234,000) of the net employment increase, followed by residential care, which contributed 155,000 jobs.

The employment recovery appears to have ground to a halt for middle-paid industries, which comprise three quarters of the UK’s workforce and are on salaries between £7.95 and £17.40 per hour.

TUC figures indicate there has been no net job creation in such industries since June 2010. This is because job creation in sectors like legal and accounting (135,000) has been cancelled out by job losses in public admin (-160,000) and social work (-68,000).

However, there was a marginal net increase in employment of 131,000 for the high paid sectors like computer programming and consultancy, which are jobs on average hourly wages of £18.40. This equated to just over one in five of new employment.

Writing on the Huffington Post UK, Katie Schmuecker, policy and research manager at the Joseph Rowntree Foundation said: "Whether work acts as an effective route out of poverty depends on the sorts of jobs people get - the levels of pay, number of hours worked, security of the contract and the possibilities for progression through promotion or a pay rise. People don't just need any old job, they need one that enables them to better their circumstances."

"These are essential questions to answer if we're to see not just a growing number of jobs, but a growing number of good jobs."

Dr Faiza Shaheen, labour market analyst at the New Economics Foundation, said: "The strategy of any-job-will do is storing up a lot of problems.

"The government goes on about employment creation is a bit of a joke really. It’s not much to cheer about when we have an increase of people reliant on government handouts.

"They’re shooting themselves in the foot by having an increase of people on low-pay as that will lead to an increase in people on benefits."

A DWP spokesperson said: "There are currently more people in work than ever before, and it is a credit to the growth of British businesses up and down the country that we now have a record number of people employed in the private sector."

To coincide with the publication of the TUC's report, General Secretary Frances O’Grady said: "The government frequently boasts about record levels of employment, even though people’s job chances have fallen in recent months.

"But what’s more concerning is that four in five new jobs are in industries where the average wage is less than £8 an hour.

"Many people who are forced into low-paid work are not only having to take a massive financial hit, but are having to put their careers on hold. This trading down of jobs can also push those with lower skills and less experience, particularly young people, out of work altogether. This is tough for workers and damaging for the wider economy.

"Well paid, highly skilled jobs need to be at the heart of our recovery but this won’t happen without government intervention to get our economy growing. We need a proper industrial policy to support growth in key sectors from high value manufacturing and renewable energy, to the creative industries."


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