The think tank found the gap has fallen by a third since the late 1990s but that workers in poorer households are less likely to be satisfied with their job and more likely to have a non-secure employment contract.
The Resolution Foundation’s A Hard Day’s Night report is the second report of the Foundation’s Unsung Britain project.
Different parts of the labour market
The report found that lower-income families often work in different parts of the labour market to those in higher-income families. They are almost twice as likely to work in retail as those in higher-income families (11% versus 6%), and are significantly less likely to work in the public sector (19% versus 26%).
The study found that people in low-to-middle-income families have made dramatic progress in moving into work in recent decades. The employment rate for a 20-64-year-old in a lower-income household has increased from 54% in 1996/97 to 64% in 2022/23.
With the employment rate for those in higher-income households rising from 90% to 92% over the same period, the employment gap between the richest and poorest families in Britain (those at the 80th and 20th income percentiles) has fallen by a third.
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The report’s authors noted that the UK has seen huge employment rises among lone parents and people with disabilities from low-to-middle-income families (up 17 and 13 percentage points respectively).
However, less progress has been made in terms of improving working conditions for people in low-to-middle-income households.
They are less likely to work in ‘secure’ jobs than workers in higher-income families, as they are more likely to be employed on a zero-hours contract, to work in the gig economy, to be solo self-employed or to have a temporary contract. In total, two-and-a-half million people in lower-income Britain are employed in these ways.
Job security and job satisfaction
This relative lack of job security helps to explain why workers in low-income families consistently report lower levels of job satisfaction than those in high-income families (77% versus 82% for those in the bottom and top income quintiles respectively), say the authors.
The study found 86% of people in low-income families said that ‘security’ was a very important or essential aspect of work, making it the second-most important aspect of work (after ‘like doing the job’).
‘Security’ is less of a priority among high-income families, with ‘like doing the job’, ‘relations with boss’, ‘ability to use abilities’ and ‘ability to use initiative’ all ranking higher in terms of being very important or essential aspects of work.
Other concerns cited by workers from low-to-middle-income families in focus groups conducted by the foundation included unexpected overtime, stress at work, and bad managers.
Nye Cominetti, principal economist at the Resolution Foundation, said: “Britain has long had a huge jobs divide between rich and poor families. But that divide has fallen by a third in recent decades, thanks to huge employment gains among disadvantaged groups such as lone parents and people with disabilities.
“But Britain still has a ‘quality of work’ gap. Workers from lower-income families are less likely than those from richer households to have a secure job or be satisfied at work.
“With over four in five workers from lower-income families saying that security is a vital aspect of their work, the Government is right to focus on improving working conditions through its Employment Rights Bill in the face of opposition from business.”
