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Brexit, bad jobs and the bad jobs trap in the UK

31 January 2017

Chris Warhurst, Director of the Warwick Institute for Employment Research

Despite all the talk about inter-generational betrayal by the old of the young, the largest ratio to vote leave was amongst low-skilled workers (70%). Their frustration and desire for something to change is understandable. They are in bad jobs, are too often stuck in these jobs and jostle more than others with migrant workers.

Their situation is a symptom of three developments that have occurred in the UK labour market since the economic crisis. First, job polarisation has consolidated, with a gap between highly paid skilled jobs and low-paid low-skilled jobs. Second, non-standard employment has increased with more part-time, temporary and, the TUC notes, enforced self-employment amongst the worst paid jobs. Third, UK-born workers have benefitted less from employment restructuring as the types of jobs available change in the UK.

Eurofound has been assessing employment restructuring across the EU. As levels of skill and pay are linked, they have used pay as a proxy for job quality and divided the pay range of jobs into quintiles, charting the expansion and contraction of the number and proportion of jobs in each quintile over time.

Table 1 below shows the polarisation of jobs in the UK over 2011-15. Most jobs created in the lowest quintile (on the left) are part-time, temporary or self-employment. Those in the top quintile (on the right) are predominantly in full-time permanent work. Without a decent or solid wage floor, one consequence is that it is more difficult for low-skilled workers to plan their lives.

Table 1: Net employment change by job-wage quintile, decomposed by employment type, UK 2011-15 (1000s)

Jobs Trap

Being in bad jobs is compounded by the lack of opportunity to escape upwards into better jobs. By 2015 just over 10% of the UK workforce was not born in the UK. Further data from Eurofound shows migrant workers spread across the quintiles over 2011-15 but the largest proportion was employed in the bottom quintile – accounting for just over 20% of workers in this quintile. Across the EU generally, native workers have tended to shift upwards from the lower quintile jobs; by contrast in the UK many native workers are more likely to stay in these jobs. As a consequence, UK low-skilled workers jostle more with migrant workers, not just relative to similar workers across the EU but compared to other UK workers employed in jobs in the other quintiles. Things are unlikely to get better any time soon for these UK-born workers. With a policy emphasis on higher education and the creation of more graduates, further education has been and continues to be chronically under-funded in the UK. But it is vocational education and training that would help these workers springboard out of bad, low-skilled jobs and into better, intermediate-level skilled jobs.

When she became Prime Minister, Theresa May promised to address the plight of these workers, saying that she would listento their frustrations. A good place to start would be to introduce polices that offer employment enrichment that improves job quality and provides springboards out of bad jobs. Simply curbing migration won’t help. Government policy is needed that raises and enforces employment standards. Funded training opportunities that provide an escape route out of the bad jobs trap would also help. More broadly there should be ministerial responsibility for job quality. Whilst the current Department for Work & Pensions has a role in getting the unemployed into jobs, what happens to those workers once they’re in those jobs is ignored. That has to change if the frustrations of the low skilled are to be addressed. Listening has to translate into action.

This blog draws on material from Chris Warhurst’s ‘Accidental tourists: Brexit and its toxic employment underpinnings’, Socio-Economic Review, 14(4): 819-825, 2016, and is one of a number of articles in a special issue of the journal entitled: Brexit: understanding the socio-economic origins and consequences.