The low pay, no-pay cycle

Low pay is endemic in the UK labour market. While the issue has recently moved to the forefront of the public debate on employment and job quality, it is a longstanding feature of the UK economy. More than one in five workers in the UK experience low pay, a proportion that has changed little in more than 25 years.

This research:

• assesses the scale of the ‘low-pay, no-pay’ phenomenon, whereby people cycle between periods of low pay and worklessness. Being low paid increases the probability of periods of worklessness by around 10 per cent, after accounting for a host of individual, family and employment characteristics;
• finds that more than a third of low-paid workers (38.4 per cent) experience a period of worklessness over a four-year period, and provides new evidence on the risk of job loss among low-paid workers in the UK;
• calculates the relationship between a host of individual and job-related factors and the risk of job loss.