The Resolution Foundation's 'Low Pay Britain' report says that little progress has been made in reducing the prevalence of low pay across the country, with 5.5 million people on low pay, around the same level as 20 years ago.
It found that the number of employees paid less than the living wage has increased by 20 per cent on last year.
The Resolution Foundation says that childcarers are particularly likely to be hit by low pay as there are relatively high numbers of women and young people in the early years workforce.
The gender bias nationally means 26 per cent of women are low paid as opposed to 17 per cent of men. However, a ‘wage squeeze’ experienced since 2002 and worsened by the recession has hit men harder, with a drop of 11 per cent in average pay compared with eight per cent for women.
Low pay is defined as £7.67, or two thirds of the average hourly UK wage.
Adam Corlett, economic analyst at the Resolution Foundation said: 'The childcare sector, which has a high concentration of young people and women among its workforce, is likely to have a higher prevalence of low pay than most other sectors. A large proportion of care workers will gain from the new National Living Wage that comes into effect from next April, which is set to transform Britain’s low pay landscape.'
Part-time employees are also more likely to be low paid, with two in five falling into this category as opposed to 13 per cent of those working full time.
The findings on self-employed earners back previous evidence from childminders showing that many do not make a profit. The self-employed typically earn less than employees, with around one in five full time employees below the low pay threshold, with 51 per cent of self employed workers earning less than the low pay threshold.
Apprentices, who earn less than the legal minimum because they are training on the job, are in the 2 per cent affected by ‘extreme low pay’.
Young people are particularly badly hit generally, with four in five employees aged under 20 low paid and one in three employees of this age receiving less than £5.75 per hour.
Impact of the national living wage
The national living wage would reduce the prevalence of low pay to its lowest level since 1985, the report found. However increasing the wage floor means that some on higher wages will experience a fall. In 2014, around 1 in 20 people were paid the minimum wage, but this is expected to rise to more than 1 in 9 people paid at or just above the legal wage floor by 2020. The national living wage (the new minimum wage) in 2020 will be at least £9.
There are no specific figures on the prevalence of low pay in childcare. The report says the entire education sector has below average prevalence of low pay, with 9 per cent of all education workers earning below the low pay threshold.
A Resolution Foundation spokesman said, ‘Even before the financial crisis hit, too many employees in Britain were low paid by the standards of the day and relative to other countries. The downturn has done little to alter that, and pay has fallen behind the cost of living. More than ever, then, there is a pressing need for strong growth – both rebounding from the crisis and beyond – that is shared with those currently on low pay.’
