Earnings gap 'widening' in flexible market

Earnings inequality in Britain is rising dramatically, increasing poverty and marginalisation, according to a new report from a leading economic think-tank.

The stark warning that the UK and US need to tackle the social consequences of their flexible labour markets is all the more notable for coming from the Organisation for Economic Co-operation and Development, a body which has in the past lavishly praised the British Government for policies which have reduced unemployment.

The new report says growing inequality is not an acceptable price to pay for reduced unemployment. It takes the view that the UK has chosen to trade off equality for jobs, in contrast to high-unemployment Continental economies.

Shadow Chancellor Gordon Brown said the figures "confirmed what we already know - that under the Tories only those at the top have benefited from Government policies."

The OECD's annual Employment Outlook foresees only a small drop in unemployment in the industrial countries as a whole in the next two years. The total will remain a little below 34 million in 1997, it predicts.

Britain is one of the handful of countries where it foresees a small decline in joblessness. It puts unemployment at an average of 2.1 million next year, and implies that it could fall below 2 million by the end of 1997. It predicts a UK unemployment rate of 7.5 per cent in 1997, just below the OECD average.

The report, to be published tomorrow, notes that the UK and the US are the only two countries where inequality is still increasing rapidly. Low- paid workers are also widespread in both countries. A quarter of all full- time workers in America and a fifth in Britain are in low-paid jobs, compared with around 10-15 per cent in other industrial economies.

The two Anglo-Saxon economies also have the lowest rates of upward mobility out of low-paid jobs, and the highest earnings volatility. Surprisingly, however, there is no evidence of an upward trend in temporary work, which accounts for a lower proportion of jobs in Britain than in many other countries.

The report says: "The risk now facing a number of OECD countries is that labour market exclusion can easily turn into poverty and dependency." It recommends changes to taxation and benefits to help people escape the poverty and unemployment traps, perhaps targeting reforms on groups that traditionally fare poorly in the labour market, such as the young, the long-term unemployed and lone parents.

It also argues that too many young people leave school without the knowledge needed for jobs in today's economy.

Britain, it points out, has the lowest percentage of 18-year-olds at school. Only 32 per cent of young men and 38 per cent of women remain in education at that age, compared to the OECD averages of 64 per cent and 66 per cent.

Many adult workers will need continuously to improve their skills if they are to reduce their risk of being out of work, the OECD says, placing a new emphasis on lifelong learning.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: Phase Co-ordinator for Foundation and Key Stage 1

Negotiable: Tradewind Recruitment: Phase Co-ordinator for Foundation and Key S...

Tradewind Recruitment: SEN Teacher

Negotiable: Tradewind Recruitment: SEN Teacher We have a fantastic special n...

Tradewind Recruitment: History Teacher

Negotiable: Tradewind Recruitment: My client is an 11-18 all ability co-educat...

Tradewind Recruitment: Year 6 Teacher

£100 - £150 per day: Tradewind Recruitment: Year 6 Teacher Birmingham Jan 2015...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee