'Underclass' of low-wage service jobs in Europe

Social and economic change in Europe is driving the creation of  low-wage service jobs that constitute a new 'underclass', according to a study funded by the European Commission.

The study's author examines trends in low-wage service employment across 19 European countries between 1992 and 2010, in order to find out whether the expansion and poor quality of these jobs are both as inevitable and inter-related as previous studies have suggested.

Key findings

  • Whereas earlier decades saw occupational upgrading, the most recent period examined has been characterised by job polarisation, and the resulting expansion of both low-wage and high-wage occupations.
  • In almost all the countries examined, low-wage service occupations comprise a growing share of the workforce – including care-givers, restaurant workers, cleaners and salespersons.
  • Female employment and national income per capita are good predictors of high levels of low-wage jobs.
  • Low or unequal wages are found to relate strongly to higher levels of employment, supporting the view that the jobs concerned are of poor quality. Further analysis of working conditions does little to alter this conclusion. The expansion of low-wage service jobs is a process that can be described as leading to a service 'underclass'.

The author concludes by suggesting areas for further research. More detailed data on job quality would help to establish whether these jobs are as poor as the analysis suggests. Information on work histories and access to social benefits would shed more light on whether the welfare state manages to compensate workers for low pay.

Source: Moira Nelson, Low-Wage Service Occupations in Europe: An Inevitable Underclass?, Working Paper 3.7, NEUJOBS Research Project (European Commission)