Thinktank reveals that share of employees classed as low paid has fallen to 18%, the lowest since 1982

A smaller proportion of UK workers are low paid than at any time since the early 1980s, due to above-inflation increases in the government’s national living wage.

A report by the Resolution Foundation thinktank said the share of employees who were officially classified as low paid – earning less than around £8.50 an hour – had fallen to 18%, the lowest since 1982.

Further planned increases in the national living wage would reduce the percentage of low paid – those earning less than two-thirds of the median hourly wage – to 15% by 2020, the thinktank said.

The number of low-paid workers is affected by the growing size of the workforce, but the Resolution Foundation said that in the year to April 2017 the total fell below five million for the first time since the early 2000s.

Over the past three years, the national minimum wage has risen from £6.70 in 2016 to £7.50 in 2017 and £7.83 from April 2018.

Conor D’Arcy, senior policy analyst at the Resolution Foundation, said: “The national living wage was the bold policy we needed to kick start a low-pay revolution, and it has seen low pay fall to its lowest levels since the early 1980s. But now is not the time for complacency. A higher minimum wage cannot solve all our low-pay challenges.

“Workers today too often find themselves stuck on the shop floor with no chance to move up the ladder. Many are employed by one of a handful of big-hiring but low-paying firms in an industry or local area with few other options available. Women remain far more likely to be trapped in low pay than men.

“Tackling these new triple threats is how business and policymakers can build on the success of the national living wage.”

The report said one in six workers in the UK remain in low-paid jobs, including more than half of those employed in bars and restaurants (58%) and almost one in four people in Nottingham (24%) and Sheffield (23%).

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Just one in six low-paid employees permanently escaped low pay between 2006 to 2016, while 22% of women were low paid compared to 14% of men.

Women were less likely to progress out of low pay, more likely to switch into other low-paying jobs and more concentrated in a handful of large firms than low-paid men.

The proportion of workers paid less than the voluntary living wage – £10.20 for London and £8.75 for the rest of the UK – fell to 22% (5.9 million) last year, the thinktank said.