A new study report funded by the PPIW and ESRC demonstrates that the sector which an individual works in has a significant impact on their income but that the level of local demand for labour is also important.
The research undertaken by Professor Anne Green, Dr Paul Sissons and Dr Neil Lee highlights low pay as a feature of the accommodation/food services, residential care, wholesale/retail, and the agriculture, forestry and fishing sectors.
Three of these sectors (accommodation / food services, residential care, wholesale and retail) are likely to have the highest employment demand in the medium term.
The authors suggest that we therefore need policies which focus on upgrading skills and developing career ladders in these sectors in order to help reduce low pay and in-work poverty.
However, they also found that local conditions also affect wage growth. The authors report that it is the aggregate level of local labour demand change, rather than sector-specific employment change, which is most likely to drive wage increases.
Therefore policies which focus on growth sectors alone are unlikely to have a significant impact on poverty. Sector based policies need to be part of a broader economic framework which considers place specific factors if they are to have an impact on efforts to reduce poverty.