Length of time on minimum wage

As many as 320,000 people have been trapped on the lowest rung of the pay ladder for five years or more, it has been revealed in a new report from the Resolution Foundation think tank.

The report examines the length of time people remain on the minimum wage, and the characteristics of those groups of workers who remain stuck on it for longest. It uses data from the Annual Survey of Household Earnings and New Earnings Survey Panel Dataset.

Key findings

  • As many as 17 per cent of all those currently earning the minimum wage (or up to 25p an hour above it) have only ever held jobs at this pay level when they have been employed in the last five years.
  • There are 90,000 workers who have never earned more than 25 pence above the minimum wage in the 13 years since it was introduced in 1999.
  • The overwhelming majority of those who have stayed in minimum wage work are women. Around 62 per cent of all minimum wage workers are women – yet women make up 73 per cent of those trapped in minimum wage work for the last five years. Among those who have only had minimum wage jobs in the last ten years, almost four in five are women.
  • There is a growing trend for minimum wage earners to split into two groups: new entrants to the labour market (including young people), many of whom move quickly on to higher pay; and, on the other hand, workers who do not escape minimum wage work for an extended period of time. In 2004 the proportion of minimum wage workers who had not escaped minimum wage work in the previous five years was 12 per cent – increasing to 17 per cent by 2012.
  • Part-time workers are more likely to have remained in minimum wage work. They make up 62 per cent of all minimum wage workers, but 77 per cent of those who have remained at the minimum wage for 10 years.

Source: Conor D'Arcy and Alex Hurrell, Minimum Stay: Understanding How Long People Remain on the Minimum Wage, Resolution Foundation
LinksReport | Summary | Resolution Foundation press release | Guardian report

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Publication date: 
Oct 26 2013