Magazine article Teaching Business & Economics

In the News

Magazine article Teaching Business & Economics

In the News

Article excerpt

Wage inequality begins to fall

After over two decades of falling mobility people are now more able to work their way out of poverty, according to a new report.

Researchers at the Centre for Economic Performance and Centre for the Analysis of Social Exclusion have found that wage mobility - how much a person's earnings change from year to year - has risen since 2000. Long-run inequality -the difference between how much the poorest and richest people earn over a number of years - has fallen.

The study, The Changing Pattern of Earnings: employees, migrants and low-paid families, analyses the earnings of a large group of people over 30 years. It finds that from the late 1970s, inequality of annual earnings -the difference in the amount individuals earn - grew considerably.

This contributed to large increases in child poverty, so that by 1997 about a third of all British children lived in relative poverty. Important contributory factors were low skill levels, high unemployment and benefit levels, which were insufficient to lift families out of poverty,

However, the report concludes that since 2000, wage mobility has risen and wage inequality has fallen. And since the late 1980s, women earners have overtaken men in achieving higher wage mobility.

The study, for the Joseph Rowntree Foundation, also concludes that the introduction of the working families tax credit in 1999 seems to have increased employment and job retention, increasing the incomes of many low-income families. It found no evidence that employers used the working families tax credit to keep pay increases down. This may have been helped by the simultaneous introduction of the national minimum wage,

Source: Centre for Economic Performance at the London School of Economics, 29 October 2008

CIPD criticises delays in flexible working legislation

Plans to delay the implementation of legislation to extend the right to request flexible working to the parents of older children send out completely the wrong message and risk doing more harm than good to UK competitiveness, according to Jackie Orme, chief executive of the Chartered Institute of Personnel and Development.

Responding to reports that Lord Mandelson has ordered a delay in the implementation of the extension, Jackie Orme said: "These reports send out completely the wrong message. They assume that flexible working is a burden on business and the kind of charitable extra that can be cut back in tougher times. The reality is that flexible working can deliver competitive advantage by improving employee engagement and attracting talented people to organisations that otherwise might remain outside the workforce.

"The existing right to request flexible working is a model example of light-touch regulation that has helped to change attitudes without causing difficulties for businesses. Our research shows that many firms, large and small, are going well beyond the existing regulations in any case - extending flexible working to many more employees than required by law. They recognise the positive impact flexible working policies have on their businesses. But the message sent out by a delay to 'reduce burdens' on business will damage efforts to make the substantial business case for flexible working.

"Our research shows that part-time and flexible workers are happier, more engaged with their work, and therefore more likely to perform better and be more productive. …

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