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Low-paid workers saw their real hourly wage rate rise by just 40p in the last 10 years, a shock report reveals today.

Grafters “trapped” in poorly-paid jobs were unable to “escape” an “endemic, vicious” low-wage cycle, according to experts.

A Resolution Foundation study for the Social Mobility Commission outlines how only one in six low-paid workers (17%) managed to permanently escape low pay in the past decade.

A quarter of low-paid workers remained permanently stuck in low pay and nearly half (48%) moved in and out of low pay.

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Commission chairman Alan Milburn, a former Labour Cabinet Minister, said: “Britain has an endemic low pay problem. While record numbers of people are in employment, too many jobs are low skill and low paid.

“Millions of workers – particularly women - are being trapped in low pay with little chance of escape. The consequences for social mobility are dire.

He added: “A new approach is needed to break the vicious cycle where low skills lead to low pay in low quality jobs.

“Welfare policy should focus on moving people from low pay to living pay. Government should join forces with employers in a new national effort to improve progression and productivity at work.

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“Without concerted action, Britain will become more socially divided and social mobility will continue to stall.”

The ‘Great Escape?’ report found women are more likely to suffer low pay than men and are far more likely to get stuck in low pay.

Women in their early 20s find escaping especially difficult, with the lack of quality, flexible work to fit alongside childcare the biggest barrier.

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Nearly two thirds (64%) of workers stuck in low pay work part-time, while nearly 71% who escaped low pay were in full time work.

On average, those trapped on low pay saw their hourly wages rise by just 40p over the last decade when inflation was taken into account, compared to a £4.83 pay rise for those who have permanently escaped.

Resolution Foundation senior policy analyst Conor D’Arcy said: “Britain has one of the highest proportions of low-paid work in the developed world.

“And while three-quarters of low-paid workers did manage to move into higher-paying roles at some point over the past decade, the vast majority couldn’t sustain that progress.

“This lack of pay progress can have a huge scarring effect on people’s lifetime living standards.”

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Meanwhile, an IPPR think tank study shows wealth inequality has been rising for the last 10 years and is set to continue growing over the next decade.

The report, commissioned by Channel 5 to mark the launch of the second series of Rich House, Poor House, found the richest 10% of families have five times the wealth of the bottom 50%.

Half of households have an average of just £3,200 in net property, pension and financial wealth, while the top 10% hold an average of £1.32million.

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The report shows every generation since the baby boomers has accumulated less wealth than the generation before had at the same age.

People born in the 1980s have just a third of the property wealth at age 28 of those born in the 1970s.

Nearly half (48%) think wealth inequality has become a bigger issue in the last decade.

Only 4% believe wealth distribution will become fairer in the next 10 years, and 57% think ministers should do more to tackle wealth inequality.

IPPR research fellow Carys Roberts said: “The old social contract in which each generation could expect more wealth than the last is broken.

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“Our work has found the vast majority of people now expect young people today to have less than the previous generation in housing wealth and savings, and more debt.

“The Chancellor has indicated he is looking at options to improve the financial position of young people in his Autumn Budget.

“Our polling shows the majority of people would support new measures to equalise wealth; these could include giving young people better access to housing and fairer taxation.”

Shadow Chancellor John McDonnell said: “This paper is another important contribution to the debate on wealth inequality in modern Britain.

“After seven years of Tory economic failure, the very richest have got extraordinarily richer while the rest of the country have missed out – particularly young people and those who live in areas outside of London and the South East.

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“In the place of Tory failure, the next Labour government will take the action needed to tax the wealthiest fairly, invest across the whole country, and build an economy that works for the many, not the few.”

Lib Dem leader Sir Vince Cable said: “This report reveals just how unequally wealth in the UK is distributed.

“When the richest 10% of the population are almost 1,000 times wealthier than the poorest 10%, it puts the very existence of social mobility in 21st Century Britain into question.

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“Tackling inter-generational inequality and the growing concentration of wealth will require radical solutions, including reforms to the taxation of land, property and inheritance.

“Our current tax system, by focusing on income rather than wealth, facilitates the accumulation of unearned assets while punishing productive activity by individuals and businesses.”