Low pay ‘endemic’ 4.1m in serious debt

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AN EXTRA 94,000 people were in work at the end of the latest three-month period, however it now emerges that the unemployment figures have only fallen because more and more people are being driven into low-paid insecure work, with the amount on zero-hours contracts at an all-time high.

When taking account of inflation, the ONS said that real wages have fallen by 0.4%. Speaking in Parliament during PM questions, Jeremy Corbyn, Labour leader said: ‘Figures show that real wages are lower today than they were ten years ago. Most people in work are worse off.’

New research by the Social Mobility Commission said that low pay was ‘endemic’ in the UK with a quarter of low paid workers permanently stuck in poorly paid jobs. It found just one in six low paid workers had managed to ‘escape’ from poorly paid jobs in the last decade.

The report defines low pay as hourly earnings below two-thirds of the median hourly wage, which works out at £8.10 last year. The median hourly wage for an average person across the entire British workforce was £12.10 per hour in 2016, according to the report.

‘This lack of pay progress can have a huge scarring effect on people’s lifetime living standards,’ commented Conor Darcy, a senior policy analyst with the think tank Resolution Foundation, which carried out the research.

On average, people stuck on low pay have seen their hourly wages rise by just 40p in real terms over the last decade. Meanwhile, the Financial Conduct Authority’s (FCA) biggest ever survey of households found that half of the UK population are ‘financially vulnerable’.

It said that its research indicated that ‘one in six people would be unable to cope with a £50 increase in monthly bills’. The survey said that 4.1 million people are already in ‘serious financial difficulty’, falling behind with bills and credit card payments, with 25 to 34-year-olds the most over-indebted.