Chronic lack of clear career routes for non-graduate workers stranding many in low pay

Upcoming Apprenticeship Levy and Skills White Paper offer once-in-a-generation chance to help ‘forgotten 40 per cent’

Poor career routes are holding back the ‘forgotten forty per cent’ of the workforce – mid-skilled workers with at least five A*-C GCSEs but without a university education. This is according to a new report published today (Wednesday) by the independent think tank Resolution Foundation for the Social Mobility and Child Poverty Commission (SMCPC).

The report, which is published ahead of the launch of a key government White Paper on skills and with the apprenticeship levy looming next April, analyses lifetime earnings of non-graduates and the factors affecting their career prospects. It shows that women bear the brunt of a lack of paths to higher earnings for those with non-graduate qualifications. Over three-fifths (62 per cent) of female non-graduates earn less than the median wage, compared to almost two-fifths of male non-graduates (38 per cent).

The report finds that while some mid-skill workers are performing well in the labour market, these ‘ladder-climbers’ are often confined to a few specific sectors: mostly men in skilled trades such as construction and manufacturing. It warns that far more non-graduates are stuck in lower-paying occupations, many of which have little relevance to their skill sets.

The analysis highlights an acute lack of decent opportunities for mothers, particularly those who are overqualified for the low-paid roles they currently work in. Their qualifications do not provide routes for these one-in-six non-graduate workers who face a lack of quality part-time jobs. Half of part-time workers in this group were paid less than the current voluntary UK Living Wage of £8.25 in 2015.

The lingering impact of the recession is also identified as damaging the prospects of young non-graduates. The analysis highlights the ‘job-blocked’ young mid-skilled as a key group whose careers are being held up by those with university degrees clogging up non-graduate roles, a post-crash trend that has yet to unwind. It says rising job mobility among young people holds the key to unblocking the jobs market and securing stronger pay growth for graduates and non-graduates alike.

The report adds that the preference of many employers for graduates both when recruiting and also when considering internal promotions, means that even a healthy jobs market may not result in better outcomes for all mid-skilled young people. The report warns that without rapid earnings growth at the start of their careers, young people face a significant lifetime pay penalty.

The report will call for a smaller number of simpler, high quality routes from education to work for those who don’t go to university. It adds that the upcoming apprenticeship levy provides an unprecedented opportunity that must be seized not squandered. It says that in order for the government’s apprenticeships drive to be a success, the levy must not simply raise revenue but underpin a drive to higher quality apprenticeships and a step change in employers demand for and use of skills.

The Foundation also highlights the need to end the political blind spot when it comes to non-apprenticeship mid-skill routes into careers. The upcoming skills White Paper should simplify the provision of education and training through FE colleges.

The report also highlights three key tasks facing the government in order to boost the career prospects of mid-skilled workers:

• Encouraging the spread of pathways that work: non-graduates are climbing the career ladder in some sectors but are stuck in others. Support for workers to match their skills to appropriate industries must be spread and shared across sectors.
• Reopening routes that have become blocked: the labour market needs unblocking so that graduates don’t clog up non-graduate roles. While a continuing labour market recovery may help to resolve this issue, the government must be alive to any structural decline in job mobility among young people.
• Creating new routes for groups that currently don’t progress: for some groups, particularly women with children. New solutions – such as the development of good quality part-time roles and ensuring Universal Credit creates stronger incentives to move up – are badly needed.

Conor D’Arcy, Policy Analyst at the Resolution Foundation, said:

“One of the strengths of university is that it provides a clear career route that graduates and employers recognise. But we’re letting down the forgotten 40 per cent of non-graduates who face a myriad of courses and qualifications and are left too often stranded in low paying jobs. Women in particular are being let down by the lack of decent career routes for non-grads.

“We can’t have a system where everyone needs a university degree in order to have a decent chance of a good job with the opportunity to move up the ladder. We also need to ensure that people are able to do jobs that suit their skillset and flexible working requirements; this will stop those with caring commitments, who are often women, from losing out.

“Learning the lessons of sectors where mid-skilled workers do well, reopening routes clogged by graduates, and creating new routes for those who are badly served by existing ones should be a high priority for the government if we want those who don’t go to university to have the chance of a good, decently-paid job with the potential of progression.”

Alan Milburn, Chair of the Social Mobility and Child Poverty Commission said:

“This research highlights that far too often the careers of those who don’t go to university hit a brick wall. It reveals a shocking picture of women not being able to put qualifications to use and an inflexible, low-pay, jobs market for young mums.

“The government’s push for three million apprenticeship starts needs to be coupled with a renewed drive to vastly increase the number of vocational courses that lead to a quality work and opportunities to improve pay.”

Notes to Editors

The non-graduate/mid-skill group is those whose highest qualification is at least Level 2 (equivalent to five A*-C GCSEs) but not higher than Level 3 (A Levels or equivalent). They make up a two-fifths of the UK’s population aged 24 to 64.

For more information contact:

Rob Holdsworth (Director of Communications) on 020 3372 2959 or 07921 236 972

Natalie Cox (Communications Officer) on 020 3372 2955 or 07983 550 337