13 January 2017
There has been a four-fold increase in the proportion of men working in low-paid, part-time jobs over the last two decades, according to new research from the Institute for Fiscal Studies.
Twenty years ago, 5% of men between the ages of 25 and 55 were working part-time on low wages; but that figure has now risen to 20%.
In turn, this has seen weekly earning inequality grow significantly among men, with higher-earners seeing better pay rises than those with lower wages, and low-paid men receiving increasingly fewer hours of work.
Although the picture for women is optimistic, with part-time hours falling and wages increasing, working households continue to rely primarily on men’s wages, so inequality in total earnings has also risen.
The IFS revealed that the highest earning households have seen wages rise by 32% since the mid-nineties; compared with just 20% for the lowest earning households.
What’s more, the research highlighted that this growing inequality is not a result of the recession, as there has been a steady increase in the wage gap over the last 20 years rather than a sudden one since the financial collapse.
To offset this inequality, the study revealed that the benefits system has had to work a lot harder to subsidise the low wages paid by employers, with tax credits and benefits boosting low incomes.
Chris Belfield, one of the authors of the report and a Research Economist at IFS, explained: “In the last twenty years, the incomes of the top 1% have pulled further away from the rest. But across the vast majority of the population income inequality has actually fallen. However, in large part this is because the tax and benefit system has worked increasingly hard to offset disparities in the pay brought home by working households, and because of the catch-up of pensioners with those of working age, as well as falls in worklessness.”
The Institute of Employment Rights argues that relying on the public purse to soften the blow of inequality in this way is not sustainable or fair, nor does it provide an incentive for good business practice or increasing the productivity of British industry such as through training staff or investing in research and innovation (key concerns for the UK at the moment due to the fact national productivity has fallen to an all-time low compared with our major global competitors).
Additionally, relying on the welfare state to help working households, rather than reserving it to provide a safety net for those out of work, means using public money that could otherwise be spent improving our public services, such as the NHS.
In our 25-point Manifesto for Labour Law, which has been adopted by the Labour Party, we propose restructuring employment law in such a way that employers are given an incentive to improve their business models and productivity, by removing the ability to compete by undercutting wages and conditions (a practice which is currently all too common).
By encouraging trade union representation among workers and allowing trade unions to bargain for better wages and conditions at both sectoral and enterprise levels, we argue that upwards pressure will be applied to the quality jobs as well as on wages, thereby reducing our reliance on public money to subsidise poor pay, and encouraging businesses to improve their products and services in order to compete.