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OPPORTUNITY IN THE OPPORTUNITY IN THE WORKPLACE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James
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OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Mar 28, 2015

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Page 1: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

OPPORTUNITY IN THE OPPORTUNITY IN THE WORKPLACEWORKPLACE

LOW-WAGE EMPLOYMENT IN LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATESEUROPE AND THE UNITED STATES

Ken Mayhew

Caroline Lloyd

Susan James

Page 2: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

BACKGROUNDBACKGROUND

Russell Sage Foundation Projects in Russell Sage Foundation Projects in the USthe US

LOW WAGE AMERICALOW WAGE AMERICA, 2004, edited , 2004, edited by Eileen Appelbaum, Annette by Eileen Appelbaum, Annette Bernhardt and Richard MurnaneBernhardt and Richard Murnane

RSF commissioned comparable RSF commissioned comparable studies in Europe studies in Europe

Page 3: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

THE EUROPEAN STUDIESTHE EUROPEAN STUDIES

5 countries: UK, France, Germany, 5 countries: UK, France, Germany, Netherlands, DenmarkNetherlands, Denmark

Common occupations in 5 sectors: Hotels, Common occupations in 5 sectors: Hotels, Hospitals, Food Processing, Retail and Call Hospitals, Food Processing, Retail and Call CentresCentres

UK team: SKOPE, National Institute for UK team: SKOPE, National Institute for Economic and Social Research, and Economic and Social Research, and StrathclydeStrathclyde

STAGE 1STAGE 1

STAGE 2 STAGE 2

Page 4: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Proportion of employees below LPT across the 5 Proportion of employees below LPT across the 5 countriescountries

FR GER NL DK UK

Year 2002 2004 2002 2002 2002

% employees below LPT

12.2 * 20.8 17 8.5 22.1

% male employees below LPT

8.0 * 13.8 6.5 (approx)

13.2

% female employees below LPT

17.0 * 21.1 10.5 (approx)

31.3

* refers to

Page 5: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Proportion of UK workforce falling below LPT, Proportion of UK workforce falling below LPT, 1975-20051975-2005

0

5

10

15

20

25

30

35

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005

Year

Per

cen

t o

f w

ork

forc

e b

elo

w l

ow

pay

th

resh

old

Men-NES

Women-NES

Total-NES

Men-ASHE

Women-ASHE

Total-ASHE

Page 6: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

THE GROWTH OF LOW PAID WORKTHE GROWTH OF LOW PAID WORK

The rise in earnings inequality generallyThe rise in earnings inequality generally

The decline of trade unionsThe decline of trade unions

The removal of legislation and institutions The removal of legislation and institutions which had provided some protection for which had provided some protection for the low paidthe low paid

Page 7: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Distribution of low-paid employment in the Distribution of low-paid employment in the

UK economy, analysed by sectorUK economy, analysed by sector

SIC code Sector

% of total low-paid employees in UK economy

% of employees in sector earning

below LPT

52 Retail 26 49

85 Health services 13 18

55 Hotels 12 59

15-37 Manufacturing 9 13

80 Education 8 16

90-93 Social and community services 7 29

74Cleaning, security and miscellaneous business services 6 18

60-64 Transport and communications 5 13

50-51 Wholesale 5 22

45 Construction 3 13

65-73 Other private services 3 8

75 Public administration 2 6

01-14; 40-41 Other industries 1 15

TOTAL 100Source: Labour Force Survey

Page 8: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Proportion of employees earning less Proportion of employees earning less than 2/3 of median hourly wages, than 2/3 of median hourly wages,

1976-20011976-2001

  Percentage of group who are low paid

  Full-time Part-timeMale Female PT FT Total

  Male Female Male Female

1976 6 26 41 33 6 27 34 12 14

1981 6 24 42 46 7 30 46 12 16

1986 8 24 54 52 9 31 52 13 18

1991 9 22 53 50 10 29 50 14 19

1996 11 22 54 50 13 30 51 15 21

2001 11 20 54 49 13 29 50 15 21

Page 9: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Proportion of employees earning less than Proportion of employees earning less than 2/3 of median hourly wages, 2/3 of median hourly wages,

1976-2001, analysed by age group1976-2001, analysed by age group

Percentage of age group who are low paid

16-24 25-29 30-39 40-49 50-59 60 plus Total

1976 31 7 9 10 10 18 14

1981 30 7 10 13 14 21 16

1986 35 10 12 14 15 22 18

1991 35 12 13 16 18 29 19

1996 44 16 15 16 21 34 21

2001 46 16 15 16 20 35 21

Source: New Earnings Survey Panel Dataset.

Page 10: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Employees earning less than 2/3 of Employees earning less than 2/3 of median hourly wages, 1991-2001, median hourly wages, 1991-2001,

analysed by selected occupational groupanalysed by selected occupational group New Earnings Survey (SOC 1990 classification)

% of occupation group who are low paid

SOC 1990

1991 1996 2001

640 Assistant nurses, nursing auxiliaries 14 17 15

641 Hospital ward assistants 31 33 39

720 Sales assistants 66 66 66

721 Retail cash desk and check-out operators 65 74 78

800 Bakery, confectionery process operatives 41 38 46

809 Other food, drink and tobacco process operatives 23 23 25

958 Cleaners/domestics 67 73 76

Page 11: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Annual Survey of Hours and Earnings (SOC 2000 classification)

% of occupation group who are low paid

SOC 2000   2005

6111 Nursing auxiliaries and assistants 19

7111 Sales and retail assistants 75

7112 Retail cashiers and check-out operators 78

7211 Call centre agents/operators 27

8111 Food, drink and tobacco process operatives 31

9233 Cleaners, domestics 76

Page 12: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Earnings experience of workers in lower Earnings experience of workers in lower quartile (Q1) of earnings distribution in quartile (Q1) of earnings distribution in

1977, 1984 and 1991 1977, 1984 and 1991 1977- 83 1984 - 90 1991- 97

Total % in Q1 in Year 1 who were still employed and still in Q1 in Year 7

50.9 49.6 40.1

Total % in Q1 in Year 1 who were still employed and still in either Q1 or Q2 in Year 7

79.6 79.8 82.8

Males % in Q1 in Year 1 who were still employed and still in Q1 in Year 7

28.0 33.8 29.8

Males % in Q1 in Year 1 who were still employed and still in either Q1 or Q2 in Year 7

61.4 66.4 74.4

Females % in Q1 in Year 1 who were still employed and still in Q1 in Year 7

83.1 56.9 45.3

Females % in Q1 in Year 1 who were still employed and still in either Q1 or Q2 in Year 7

97.6 86.0 87.1

Source: McKnight, 2000, Tables 6.4-6.6

Page 13: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

MethodologyCall

CentresFood Pro-cessing

Hotels Hospitals Retail

Segments

4 finance 4 utilities

3 meat processing 3 confectionery

3 4* chain 1 5* chain 2 Budget chain 2 2-3* independent

7 NHS hospitals

4 food retailers 4 electrical retailers

Focus in-house v outsourcing union v non-union

Meat – initially pork; predominantly chicken Chocolate and sugar confectionery More than 100 employees Mass v batch production

Independent v chain labour market location 4-5* v 2-3*

geographical areas in-house v. out-sourced

High quality v low-priced products

No. 129 interviews

70 interviews 68 interviews

54 interviews 58 interviews

Interviews

Managers HR Managers Team Leaders customer service agents Union reps Managers of temp work agencies

Managers Team Leaders supervisors Operatives Union/Employee Reps

GM Op Manager HR Manager Housekeeping Manager Housekeeping Supervisor Room Attendants

Finance Managers HR Managers Nursing managers domestic services managersTemp work bank managers Assistant nurses Cleaners

Managers in HQ Store managers Jr store managers Supervisors Sales assistants & check-out operators

Page 14: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Food processing

Turnover of £58 billion in 2004

6,000 companies employing 385,000 workers

Exports accounted for only 15% of sales in 2004

The ‘Big Four’ account for 70% of all food sales

Page 15: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Food processing work

Varies from continuous production with high levels of automation to hand-made, individual or small batch products

Skills requirements generally fairly basic

Manual dexterity Ability to undertake routine and repetitive tasks

Jobs learnt in a short space of time

Page 16: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Issues of pay

Chocs Novelty Minty Clucks Ltd

Poultry Co

Baconco

Median Pay 5.64 6.45* 7.22 6.03* 6.71* 7.61 (mean)

% Workers below LPT

83% 41% 0% 63% 29% Below 10%

AgencyPay

5.05-5.52

5.05-5.60

5.05 5.05 5.05 5.05

Agency below LPT

100% 100% 100% 100% 100% 100%

Team Leader Pay(highest)

8.45 7.61* 12+* 7.38* 8.27* na

*Alternating 2 shiftsLPT = £6.37na = data not available

Page 17: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Issues of payYou would struggle…especially if you are the main earner...I mean it doesn’t go that far. (Op, Mintys). For other workers, the only way to live on the pay is to share accommodation costs, be part of a dual income family or undertake substantial levels of overtime. Undertaking an additional 20 hours per week all year could raise annual income from around £12,500 to £20,000. (Shop Steward, Baconco)

I have to do overtime… my husband he’s disabled so he can’t work… so I do the overtime so that I can pay the mortgage. (Op, Clucks Ltd)

Most people are forced without a shadow of doubt are forced to work more than 48 hours to bring home a living wage. It’s as simple and straightforward as that. It’s not a case of want, it’s a case of need’ (Shop Steward, Baconco)

Page 18: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Qualifications

No qualifications required for entry level operative jobs

Over 1/3 of all employees in the sector do not have basic school leaving age qualifications

Less than 1/3 have intermediate qualification or above

Page 19: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

What are the jobs like?

Pay depressed

Working harder

Benefits cut

Heavy reliance on foreign workers

Page 20: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Hotel Industry Remains a low skill, labour intensive service industry with low wages

Suggested total turnover of £27 billion

Employing between an estimated 240,000 to 309,000

Significant revenue fluctuations

Page 21: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Hotel Work

Characterised by low pay, poor working conditions and patterns, and high labour turnover

I liken my staff to the elves in Harry Potter – beds are made, work is done, but no one sees anyone, the majority of work is done behind the scenes and staff are more or less invisible’ Executive Housekeeper, cited in Hunter-Powell

Page 22: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Issues of payH1 H2 H3 H4 H5 H6 H7

Star rating*

4 star deluxe

5 star 2/3 star

4 star deluxe

2/3 star

2/3 star

2/3 star budget

Pay £5.05 per hour

Salaried = £6.16 per hour

£1.72 per room(approx. £6.88 p/h)

£5.05 per hour

£5.05 per hour

£5.05 per hour

£2.47 per room(approx £5.61 p/h)

Rooms in hotel

117 186 380 111 31 60 60

No. of rooms to clean

14 per 8 hrs

11 per 8 hours

16 per 4 hours

14 per 8 hours

9 per 4.5 hours

16-18 per 5 hours approx.

10-15 per 5-6 hours approx.

No. of RAs

14 f/t 30 = 25 f/t, 5 p/t

31 = 23 contract cleaning employees, 8 TWA

14 f/t 5 f/t 4 f/t 4 f/t

Page 23: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Issues of pay

‘for the work you do the rate of pay is unbelievable’ RA, H1 (4* hotel)

‘The pay is crap’ RA, H4 (4* hotel)

‘I think it is difficult to get the right people now…people don’t want to come into the hotel industry…I think it is all down to pay…if you can sit in Tesco’s for £4.85 on your bum putting food through a scan then people are going to do that rather than physically bending down and moving beds and washing floors and stuff like that’ Head Housekeeper, H1 (4* hotel)

Page 24: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Recruitment

No qualifications required

Heavy use of agencies in London

Local women in Scotland

The Polish factor is a big factor in London right now. Britain has opened the door completely to Polish labour which was strangely supported by the government largely because the business community very much supported it because it’s fantastic for business. It is great for the hotel industry to have the labour market flooded with desperate, exploitable Polish women. The people that are doing outsourced chambermaid jobs are Lithuanian, Polish, Russian, Latin American (Living Wage Campaign Officer)

Page 25: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Training Training was on-the-job and shadow existing workers

Work alone with some supervision and fewer rooms

Deemed competent around 12 weeks

Statutory occupational health and safety training

Upper market hotels committed to more formal training and regular on-going training thereafter

Middle market hotels had limited training beyond statutory

Page 26: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Career Progression Opportunities for progression were limited due to flat structure and smaller sized departments

Room attendants, supervisors and department managers were the main jobs

Could become a ‘self-checker’

Some of the hotels provided the opportunity to work in other departments and in some cases other hotels within the group

‘We are a bit scared, as soon as you say the hotel’s university courses. I mean I did too, I really freaked out when I was told you had to do this but I think they are great now and I have been trying to encourage the girls’, Head housekeeper, H4

Page 27: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Call centresCall centres

Call centre agentsCall centre agents 10% paid close to NMW10% paid close to NMW 30% paid below LPT (40% part-timers)30% paid below LPT (40% part-timers)

8 Cases8 Cases Financial services & utilities (2 outsourcers)Financial services & utilities (2 outsourcers) In-bound, mass marketIn-bound, mass market

Page 28: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Call centre jobsCall centre jobs call length: 2.5 - 6 minutescall length: 2.5 - 6 minutes number of calls: 50-120 per daynumber of calls: 50-120 per day tightly monitored & controlledtightly monitored & controlled 1-6 weeks initial training1-6 weeks initial training

‘‘so tedious, it was like watching paint dry’ (Agent F4)so tedious, it was like watching paint dry’ (Agent F4)

‘‘I think it’s just the nature of the job at the end of the I think it’s just the nature of the job at the end of the day… the fact that you’re in a call centre and you’re day… the fact that you’re in a call centre and you’re taking non-stop calls… It’s just some people can do taking non-stop calls… It’s just some people can do that for a long period of time and others can’t’ (Agent that for a long period of time and others can’t’ (Agent F3)F3)

Page 29: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Improving job quality?Improving job quality?

6 companies: quality issues & labour 6 companies: quality issues & labour turnoverturnover

Response:Response:– Less agency workersLess agency workers– Pay increasesPay increases– Improve working timeImprove working time– Other activities, eg. employee involvement, Other activities, eg. employee involvement,

social events, trainingsocial events, training No changes to job designNo changes to job design ‘‘Revolving door’ mentalityRevolving door’ mentality

Page 30: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Retail sectorRetail sector

26% of all low paid workers are in retail26% of all low paid workers are in retail

70% check out operators & sales assistants below 70% check out operators & sales assistants below LPTLPT

Intense competition but increasing concentration Intense competition but increasing concentration & largely profitable& largely profitable

CasesCases Food retailers & electrical/ electronic goodsFood retailers & electrical/ electronic goods

High quality v low priceHigh quality v low price

Page 31: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

General trendsGeneral trends

FoodFood No qualificationsNo qualifications Customer service Customer service

skillsskills 2-5 days training2-5 days training Part-time women on Part-time women on

shifts + students etc.shifts + students etc. Lack of opportunities Lack of opportunities

for part-timersfor part-timers

ElectronicsElectronics No qualificationsNo qualifications Product knowledgeProduct knowledge 2-5 days training2-5 days training Full-time men on Full-time men on

shifts + overtimeshifts + overtime Some opportunities, Some opportunities,

eg. management eg. management developmentdevelopment

Page 32: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

HospitalsHospitals

17% nursing assistants & 56% cleaners < LPT17% nursing assistants & 56% cleaners < LPT

CasesCases NHSNHS In-houseIn-house & outsourced& outsourced

Key DevelopmentsKey Developments Major increase in spending followed by budget constraintsMajor increase in spending followed by budget constraints Agenda for Change – national pay scales, job ladders, end Agenda for Change – national pay scales, job ladders, end

of two tier systemof two tier system Improved payImproved pay Other benefits, eg. sick pay, pensions, holidays, unsocial Other benefits, eg. sick pay, pensions, holidays, unsocial

hours paymentshours payments

Page 33: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Nursing AssistantsNursing Assistants

No qualifications but No qualifications but GCSEs Maths & GCSEs Maths & English preferredEnglish preferred

Downward mobilityDownward mobility Job ladders improvedJob ladders improved NVQ2 & 3NVQ2 & 3 Pay differentials Pay differentials

narrowed with narrowed with cleanerscleaners

Lack of postsLack of posts

CleanersCleaners

No qualificationsNo qualifications

‘‘reasonable standard reasonable standard of literacy & of literacy & numeracy’numeracy’

Downward mobilityDownward mobility

No incentives to trainNo incentives to train

Outsourcing barrier to Outsourcing barrier to progressionprogression

Page 34: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Lessons for skills policyLessons for skills policy

Four popular assertions follow, all of Four popular assertions follow, all of which are strong elements in current which are strong elements in current English/UK skills policy, yet all of English/UK skills policy, yet all of which are contradicted by our which are contradicted by our findings on low paid work.findings on low paid work.

Page 35: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

1. Employers are being held 1. Employers are being held back by lack of skillsback by lack of skills

‘‘The skills of the workforce are a key The skills of the workforce are a key driver of the productivity of an economy. driver of the productivity of an economy. Improving the skills of individuals Improving the skills of individuals enables firms to improve products and enables firms to improve products and processes, to adapt more quickly to processes, to adapt more quickly to changing competitive environments and changing competitive environments and to increase opportunities for to increase opportunities for investment.’ investment.’

(HM Treasury, Pre-budget Report (HM Treasury, Pre-budget Report 2007:51)2007:51)

Page 36: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

2. Level 2 = minimum platform 2. Level 2 = minimum platform for employabilityfor employability

Market FailureMarket Failure

‘‘We cannot rely on employers to invest in the We cannot rely on employers to invest in the skills of the lowest skilled without some form skills of the lowest skilled without some form of government intervention as there is a of government intervention as there is a market failure, most likely because market failure, most likely because employers cannot be sure the individual has employers cannot be sure the individual has the ability or motivation to benefit from the ability or motivation to benefit from training’training’

((DfES/DWP (2006: 29) Evidence to Leitch)DfES/DWP (2006: 29) Evidence to Leitch)

Page 37: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

3. Qualifications = 3. Qualifications = progressionprogression

Bill Rammell, the further and higher Bill Rammell, the further and higher education minister defending the education minister defending the focus on boosting skills in colleges:focus on boosting skills in colleges:

‘‘vocational training would save vocational training would save thousands of teenagers from a thousands of teenagers from a future in low-paid jobs’future in low-paid jobs’

(Report in TES 23 June 2006 p1)(Report in TES 23 June 2006 p1)

Page 38: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

4. Skills = new protection in 4. Skills = new protection in the labour marketthe labour market

We conclude that whatever market We conclude that whatever market segmentation does exist is explained segmentation does exist is explained primarily by social disadvantage, caused by primarily by social disadvantage, caused by lack of basic skills and qualifications, rather lack of basic skills and qualifications, rather than by barriers created by labour law.  In than by barriers created by labour law.  In the UK context, therefore, we recommend the UK context, therefore, we recommend that measures to improve employability, that measures to improve employability, rather than modernisation of labour law, rather than modernisation of labour law, should be the main priority of government should be the main priority of government policy toward the labour market.policy toward the labour market.

(Select Committee on European Union, 22(Select Committee on European Union, 22ndnd Report, Report, 2007)2007)

Page 39: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Recruitment criteriaRecruitment criteria

Call centre agentCall centre agentQualifications - NONEQualifications - NONEOther – ‘Attitude’, personality, ‘staying Other – ‘Attitude’, personality, ‘staying

power’power’

Food processing operativeFood processing operativeQualifications – NONEQualifications – NONEOther - Basic English, dexterityOther - Basic English, dexterity

Page 40: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Recruitment criteriaRecruitment criteria

Hotel room attendantHotel room attendantQualifications – NONEQualifications – NONEOther – NONEOther – NONE

Nursing assistantNursing assistantQualifications – GCSE Maths/English Qualifications – GCSE Maths/English

preferredpreferredOther – Experience in caringOther – Experience in caring

Page 41: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Recruitment criteriaRecruitment criteria

Sales assistantsSales assistants

Qualifications – NONEQualifications – NONE

Other – ‘attitude’, ‘friendliness’, Other – ‘attitude’, ‘friendliness’, communications skills, basic literacy communications skills, basic literacy and numeracy.and numeracy.

Page 42: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Example 1Example 1

So I suppose you don’t need to be perfect So I suppose you don’t need to be perfect for English, well, not English but maths for English, well, not English but maths and everything but as long as you can and everything but as long as you can sort of read ‘Danger’ and don’t walk in sort of read ‘Danger’ and don’t walk in front of the [machine] that sort of thing.front of the [machine] that sort of thing.

(Line operative, female, poultry (Line operative, female, poultry processing factory, previously worked processing factory, previously worked as a nanny (trained) & chip fryer)as a nanny (trained) & chip fryer)

Page 43: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Example 2Example 2

We are not so much interested in product We are not so much interested in product knowledge, because you can train that. For me knowledge, because you can train that. For me it’s about flexibility… because we do operate it’s about flexibility… because we do operate eight to eight, Monday to Saturday. … It’s about eight to eight, Monday to Saturday. … It’s about attitude. It’s about telephone manner. But again, attitude. It’s about telephone manner. But again, you can train that. It’s the way that they speak on you can train that. It’s the way that they speak on the phone. … Keyboard skills to a large extent. the phone. … Keyboard skills to a large extent. Knowledge of systems, not necessarily ours but Knowledge of systems, not necessarily ours but just your way around a computer. You know. So just your way around a computer. You know. So those are the sort of things that we tend to look those are the sort of things that we tend to look for. for. But it is more about flexibility and attitude.But it is more about flexibility and attitude. (Operations manager, financial call centre)(Operations manager, financial call centre)

Page 44: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Qualification levelsQualification levels

Majority of workers had few/ no Majority of workers had few/ no qualifications – process operative, hotel and qualifications – process operative, hotel and hospital cleaners, retailhospital cleaners, retail

Significantly levels of over-qualification – Significantly levels of over-qualification – call centres, hospitals, migrant workerscall centres, hospitals, migrant workers– Call centres: graduates/ A levels etc. (transitory Call centres: graduates/ A levels etc. (transitory

job)job)– Hospitals: women returnersHospitals: women returners

Downward occupational mobilityDownward occupational mobility

Page 45: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Examples of previous jobsExamples of previous jobs Assistant nursesAssistant nurses

– Dairy farm manager (own business)Dairy farm manager (own business)– Shop manager, Cable TV salesShop manager, Cable TV sales– Aerobics teacherAerobics teacher– Owner of hair salonOwner of hair salon– Accounts clerkAccounts clerk

CleanersCleaners– Accounts/bookkeepingAccounts/bookkeeping– Retail supervisor/ TailorRetail supervisor/ Tailor– Qualified (level 3) nursery nurseQualified (level 3) nursery nurse

Page 46: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Hotel room attendantsHotel room attendants

RAs interviewed in a five star hotel outer RAs interviewed in a five star hotel outer LondonLondon

RA1 Polish - studied economics at university RA1 Polish - studied economics at university & worked in a bank& worked in a bank

RA2 Polish – retail supervisorRA2 Polish – retail supervisor RA3 Vietnamese – no formal qualificationsRA3 Vietnamese – no formal qualifications RA4 Slovakian – degree in accountingRA4 Slovakian – degree in accounting RA5 British – studied childcare at college – RA5 British – studied childcare at college –

dropped outdropped out

Page 47: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Progression opportunities for Progression opportunities for low paid workerslow paid workers

Very limited 1:15 – 1:30?Very limited 1:15 – 1:30? Flat organisational structuresFlat organisational structures Supervisory/team leaders but little Supervisory/team leaders but little

extra payextra pay Rare opportunities for part-timersRare opportunities for part-timers Managers – graduates cascading Managers – graduates cascading

down through labour market into 1down through labour market into 1stst line manager jobsline manager jobs

Page 48: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Qualification = protection in Qualification = protection in labour marketlabour market

Requires labour market shortage e.g. Requires labour market shortage e.g. some call centres (due to turnover)some call centres (due to turnover)

Improved pay and benefitsImproved pay and benefits

Less agency workersLess agency workers

Improved shift systemImproved shift system

Increased employee engagementIncreased employee engagement

No change to work organisation OR No change to work organisation OR skill.skill.

Page 49: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Migrants are the new reserve Migrants are the new reserve army of labour….army of labour….

Migrant workers Migrant workers – Out-compete locals ‘attitude’ and ‘work ethic’Out-compete locals ‘attitude’ and ‘work ethic’– Willingness to work for very low payWillingness to work for very low pay

Our pay scales are lower [than other local Our pay scales are lower [than other local companies] … We tried local, you just can’t get the companies] … We tried local, you just can’t get the people. Even if you get the numbers, you can’t get people. Even if you get the numbers, you can’t get the quality. They will turn up for a couple of days the quality. They will turn up for a couple of days and then won’t bother getting out of bed again so and then won’t bother getting out of bed again so the only way to get reliable agency staff is from the only way to get reliable agency staff is from abroad. abroad.

(HR manager, food processing, agency pay= NMW)(HR manager, food processing, agency pay= NMW)

Page 50: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Qualifications, training and Qualifications, training and progressionprogression

No qualification requirementsNo qualification requirements

Many ‘over-qualified’ workersMany ‘over-qualified’ workers

Lack of trust in qualifications?Lack of trust in qualifications?

Lack of positions not unwillingness to Lack of positions not unwillingness to traintrain

Page 51: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

ConclusionConclusion

Jobs very simple, easy to learn, TayloristJobs very simple, easy to learn, Taylorist Jobs require little trainingJobs require little training Most employers will train at lower levels Most employers will train at lower levels

if its neededif its needed Abundant labour supply removes Abundant labour supply removes

constraintsconstraints Regulatory constraints minimalRegulatory constraints minimal What about ‘displaced locals’?What about ‘displaced locals’?

Page 52: OPPORTUNITY IN THE WORKPLACE LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES Ken Mayhew Caroline Lloyd Susan James.

Better

Worse

Call centres

FoodHospitals HotelsRetail

Are jobs getting better or worse?