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OPPORTUNITY IN THE WORKPLACE

OPPORTUNITY IN THE WORKPLACE. LOW-WAGE EMPLOYMENT IN EUROPE AND THE UNITED STATES. Ken Mayhew Caroline Lloyd Susan James. BACKGROUND. Russell Sage Foundation Projects in the US LOW WAGE AMERICA , 2004, edited by Eileen Appelbaum, Annette Bernhardt and Richard Murnane

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OPPORTUNITY IN THE WORKPLACE

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

  2. BACKGROUND • Russell Sage Foundation Projects in the US • LOW WAGE AMERICA, 2004, edited by Eileen Appelbaum, Annette Bernhardt and Richard Murnane • RSF commissioned comparable studies in Europe

  3. THE EUROPEAN STUDIES • 5 countries: UK, France, Germany, Netherlands, Denmark • Common occupations in 5 sectors: Hotels, Hospitals, Food Processing, Retail and Call Centres • UK team: SKOPE, National Institute for Economic and Social Research, and Strathclyde • STAGE 1 • STAGE 2

  4. Proportion of employees below LPT across the 5 countries * refers to

  5. Proportion of UK workforce falling below LPT, 1975-2005

  6. THE GROWTH OF LOW PAID WORK • The rise in earnings inequality generally • The decline of trade unions • The removal of legislation and institutions which had provided some protection for the low paid

  7. Distribution of low-paid employment in the UK economy, analysed by sector Source: Labour Force Survey

  8. Proportion of employees earning less than 2/3 of median hourly wages, 1976-2001

  9. Proportion of employees earning less than 2/3 of median hourly wages, 1976-2001, analysed by age group Source: New Earnings Survey Panel Dataset.

  10. Employees earning less than 2/3 of median hourly wages, 1991-2001, analysed by selected occupational group New Earnings Survey (SOC 1990 classification)

  11. Annual Survey of Hours and Earnings (SOC 2000 classification)

  12. Earnings experience of workers in lower quartile (Q1) of earnings distribution in 1977, 1984 and 1991 Source: McKnight, 2000, Tables 6.4-6.6

  13. Methodology

  14. 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

  15. 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

  16. Issues of pay *Alternating 2 shifts LPT = £6.37 na = data not available

  17. You 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) Issues of pay

  18. 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

  19. What are the jobs like? • Pay depressed • Working harder • Benefits cut • Heavy reliance on foreign workers

  20. 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

  21. Hotel Work 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 Characterised by low pay, poor working conditions and patterns, and high labour turnover

  22. Issues of pay

  23. 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)

  24. Recruitment • No qualifications required • Heavy use of agencies in London 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) • Local women in Scotland

  25. 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

  26. 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 Career Progression ‘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

  27. Call centres • Call centre agents • 10% paid close to NMW • 30% paid below LPT (40% part-timers) 8 Cases • Financial services & utilities (2 outsourcers) • In-bound, mass market

  28. Call centre jobs • call length: 2.5 - 6 minutes • number of calls: 50-120 per day • tightly monitored & controlled • 1-6 weeks initial training ‘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 day… the fact that you’re in a call centre and you’re taking non-stop calls… It’s just some people can do that for a long period of time and others can’t’ (Agent F3)

  29. Improving job quality? • 6 companies: quality issues & labour turnover • Response: • Less agency workers • Pay increases • Improve working time • Other activities, eg. employee involvement, social events, training • No changes to job design • ‘Revolving door’ mentality

  30. Retail sector • 26% of all low paid workers are in retail • 70% check out operators & sales assistants below LPT • Intense competition but increasing concentration & largely profitable Cases • Food retailers & electrical/ electronic goods • High quality v low price

  31. Food No qualifications Customer service skills 2-5 days training Part-time women on shifts + students etc. Lack of opportunities for part-timers Electronics No qualifications Product knowledge 2-5 days training Full-time men on shifts + overtime Some opportunities, eg. management development General trends

  32. Hospitals 17% nursing assistants & 56% cleaners < LPT Cases • NHS • In-house& outsourced Key Developments • Major increase in spending followed by budget constraints • Agenda for Change – national pay scales, job ladders, end of two tier system • Improved pay • Other benefits, eg. sick pay, pensions, holidays, unsocial hours payments

  33. Nursing Assistants No qualifications but GCSEs Maths & English preferred Downward mobility Job ladders improved NVQ2 & 3 Pay differentials narrowed with cleaners Lack of posts Cleaners No qualifications ‘reasonable standard of literacy & numeracy’ Downward mobility No incentives to train Outsourcing barrier to progression

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

  35. 1. Employers are being held back by lack of skills ‘The skills of the workforce are a key driver of the productivity of an economy. Improving the skills of individuals enables firms to improve products and processes, to adapt more quickly to changing competitive environments and to increase opportunities for investment.’ (HM Treasury, Pre-budget Report 2007:51)

  36. 2. Level 2 = minimum platform for employability Market Failure ‘We cannot rely on employers to invest in the skills of the lowest skilled without some form of government intervention as there is a market failure, most likely because employers cannot be sure the individual has the ability or motivation to benefit from training’ (DfES/DWP (2006: 29) Evidence to Leitch)

  37. 3. Qualifications = progression Bill Rammell, the further and higher education minister defending the focus on boosting skills in colleges: ‘vocational training would save thousands of teenagers from a future in low-paid jobs’ (Report in TES 23 June 2006 p1)

  38. 4. Skills = new protection in the labour market We conclude that whatever market segmentation does exist is explained primarily by social disadvantage, caused by lack of basic skills and qualifications, rather than by barriers created by labour law.  In the UK context, therefore, we recommend that measures to improve employability, rather than modernisation of labour law, should be the main priority of government policy toward the labour market. (Select Committee on European Union, 22nd Report, 2007)

  39. Recruitment criteria • Call centre agent Qualifications - NONE Other – ‘Attitude’, personality, ‘staying power’ • Food processing operative Qualifications – NONE Other - Basic English, dexterity

  40. Recruitment criteria • Hotel room attendant Qualifications – NONE Other – NONE • Nursing assistant Qualifications – GCSE Maths/English preferred Other – Experience in caring

  41. Recruitment criteria • Sales assistants Qualifications – NONE Other – ‘attitude’, ‘friendliness’, communications skills, basic literacy and numeracy.

  42. Example 1 So I suppose you don’t need to be perfect for English, well, not English but maths and everything but as long as you can sort of read ‘Danger’ and don’t walk in front of the [machine] that sort of thing. (Line operative, female, poultry processing factory, previously worked as a nanny (trained) & chip fryer)

  43. Example 2 We are not so much interested in product knowledge, because you can train that. For me it’s about flexibility… because we do operate eight to eight, Monday to Saturday. … It’s about attitude. It’s about telephone manner. But again, you can train that. It’s the way that they speak on the phone. … Keyboard skills to a large extent. Knowledge of systems, not necessarily ours but just your way around a computer. You know. So those are the sort of things that we tend to look for. But it is more about flexibility and attitude. (Operations manager, financial call centre)

  44. Qualification levels • Majority of workers had few/ no qualifications – process operative, hotel and hospital cleaners, retail • Significantly levels of over-qualification – call centres, hospitals, migrant workers • Call centres: graduates/ A levels etc. (transitory job) • Hospitals: women returners • Downward occupational mobility

  45. Examples of previous jobs • Assistant nurses • Dairy farm manager (own business) • Shop manager, Cable TV sales • Aerobics teacher • Owner of hair salon • Accounts clerk • Cleaners • Accounts/bookkeeping • Retail supervisor/ Tailor • Qualified (level 3) nursery nurse

  46. Hotel room attendants RAs interviewed in a five star hotel outer London • RA1 Polish - studied economics at university & worked in a bank • RA2 Polish – retail supervisor • RA3 Vietnamese – no formal qualifications • RA4 Slovakian – degree in accounting • RA5 British – studied childcare at college – dropped out

  47. Progression opportunities for low paid workers • Very limited 1:15 – 1:30? • Flat organisational structures • Supervisory/team leaders but little extra pay • Rare opportunities for part-timers • Managers – graduates cascading down through labour market into 1st line manager jobs

  48. Qualification = protection in labour market Requires labour market shortage e.g. some call centres (due to turnover) Improved pay and benefits Less agency workers Improved shift system Increased employee engagement No change to work organisation OR skill.

  49. Migrants are the new reserve army of labour…. Migrant workers • Out-compete locals ‘attitude’ and ‘work ethic’ • Willingness to work for very low pay Our pay scales are lower [than other local companies] … We tried local, you just can’t get the people. Even if you get the numbers, you can’t get the quality. They will turn up for a couple of days and then won’t bother getting out of bed again so the only way to get reliable agency staff is from abroad. (HR manager, food processing, agency pay= NMW)

  50. Qualifications, training and progression • No qualification requirements • Many ‘over-qualified’ workers • Lack of trust in qualifications? • Lack of positions not unwillingness to train

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