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Better skills should be recognised with better pay

There is a very common view that the jobs market is like an "hourglass" with plenty of good jobs at the top, a shrinking number in the middle and a growing number at the bottom. Jobs are divided into "lousy" or "lovely". The skills problem is then seen as how to get the low paid, who are stuck in lousy jobs at the bottom, up the ladder.

For unions, this picture is problematic. It can sound patronising to say that members don't have many skills and are stuck in lousy jobs. A more realistic picture is that many members work hard in difficult jobs where they have many skills – but those skills are not recognised or rewarded.

Much depends on whether jobs are categorised by skill or by pay. If categorised by skill, the jobs market is shaped more like a vase or flowerpot than an hourglass. There has certainly been a big growth in jobs at the top. But in the middle there are pretty much the same number of jobs and the bottom third have shrunk. There are actually fewer low skill jobs.

The problem is that pay has not followed suit. Many middle level jobs have become low paid. Hence the appearance of an hourglass, when measured by pay, and the rising number of low paid jobs at the bottom of the Labour market

This is not just an academic discussion. It is one thing to base a skills strategy on the false premise that the low paid are all low skilled. It is quite different to base a skills strategy on the recognition that many low paid jobs should be paid much better, should have their skills properly recognised and rewarded, and of course invest in additional skills too.

So the problem is how to rebuild the link between skill and pay, how to move from an hourglass to a vase shaped labour market. Of course this does not mean there is no problem about skill levels. Many workers do lack some skills while they have other skills which are just taken for granted.

Often, the problem is lack of supervisory or management skill, poor job design, low quality training, lack of appropriate qualifications. Many employers continue to work in a "low skills equilibrium" where they offer relatively poor goods and services and pay their staff badly. If they can recruit better skilled staff for low pay, so much the better, from the employers point of view.

Nor is this just a problem of unscrupulous employers, though there are plenty. If the market is designed to encourage poor skills then all employers have to follow suit or risk being driven out of business.

The point is that there is no point in tackling these issues piecemeal. None of these skills issues will be addressed until better skills are recognised with better pay. Employers will continue to get skills on the cheap or continue using a low skill business model unless they are encouraged/persuaded/regulated/incentivised to invest in, and reward, skills.

So the starting point is that whichever government is elected after 7 May must do more to ensure employers reward skill with pay.

Tom Wilson

Tom Wilson is Director of unionlearn and is responsible for the strategic leadership and management of unionlearn. He represents unionlearn at senior levels with trade unions, government and other organisations. He is responsible for developing and implementing the strategic plan. Tom also works with the unionlearn board and its advisory committees.

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