People are spending longer in the same job, creating a “promotion blockage” that risks permanently reducing the earnings of a generation of young people, according to a report.
The Resolution Foundation, which studies the “squeezed middle” of lower earning Britons, said job stability had risen steadily over the past 20 years, partly because of welcome trends such as the number of women returning to the same employer after having children, or people remaining in work until a later age.
George Osborne, the chancellor, signalled he wanted to tackle the issue of low pay when he announced a new “national living wage” in his Summer Budget this month. However, the study suggests that the lack of movement between jobs has become a cause for concern because it is curtailing “prospects for promotion, pay rises and productivity gains”.
Employees who change jobs over the course of a year typically have much faster earnings progression than those who stay in the same post. But the think-tank says that job mobility has yet to return to pre-crisis levels, and had begun falling even before the downturn.
It found that the typical earnings of people in their early 30s, born in 1983 — whose early careers were hit by the downturn, when the rate of job moves fell markedly — were about £2,800 a year lower than those born five years earlier. Young people were suffering significantly more than their older peers from the effects of falls in job mobility, according to the research.
While headline measures of job security — encompassing contract terms, pay and hours — among the whole workforce had changed little over the past 20 years, the share of 18 to 29-year-olds in insecure work had increased sharply, it found. Women were far more likely to be in insecure work than men.
The report blames the rise of zero-hours contracts (whereby employers are not obliged to guarantee any work), self-employment and part-time and temporary work for deepening insecurity for “a sizeable minority” of workers.
Paul Gregg, professor of economics and social policy at the University of Bath and an associate at the foundation, said the amount of time spent in the same job had risen steadily, particularly among women and older workers.
This shift, he said, had been supported by “a combination of financial incentives, support with childcare and employment legislation”. Although job security was “crucial to the pursuit of full employment . . . we should also be mindful about the falling rate of job moves, which are a vital way for young workers to build careers”.
Laura Gardiner, a policy analyst at the foundation, said that while the overall share of insecure work had remained “remarkably stable, even since the crash”, the recent rise of precarious forms of employment such as zero-hours contracts had led to “deeper insecurity for a sizeable minority of workers, particularly young people”.
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