Let’s make the career ladder as important as the housing ladder

12 February 2015

At the forthcoming General Election, political parties will compete to show they have the best plans to help people get on the housing ladder. NIACE argues support for people to climb the career ladder should be just as a big a priority, with a new National Advancement Service at its heart.

Are stagnant living standards the ‘new normal’?

For most of Britain’s 5 million low paid workers, it will be 2020 or beyond before their living standards are back at pre-recession levels – a lost decade. We have 1 million more people in low pay than if we were at the OECD average, and today there are more people in in-work poverty than out-of-work poverty. And once in low pay, people tend to get stuck – of every four people in low pay ten years ago, three are still low paid today.

This is not just an after effect of recession that will change as recovery takes hold – the very real risk is that stagnant living standards becomes the ‘new normal’ for the majority.

This risk derives from fundamental forces reshaping our economy. In particular, the rise of emerging economies like China and India, along with advances in technology, have meant the loss of intermediate level jobs that once provided stepping stones for people to progress. Our new hourglass labour market means the rungs of the career ladder have grown further apart.

At the same time, the decline of ‘balancing forces’ in our jobs market, such as trades unions, makes the previous automatic link between economic growth and rising wages easier to break.

But none of this is helped by shortcomings in our employment and skills systems. In particular, silo policy making has left a ‘missing middle’ of people who have worked hard and want to get on. They find an employment system that is only there for people who are out of work, and focuses just on getting them off benefits – not on a lasting career. And a skills system where funding is focused on the young and success measured by qualifications – not whether this leads to work and progression.

A new National Advancement Service

It is to fill this vacuum that NIACE proposes a new National Advancement Service.

This new Service would be open to everyone in low paid work.  People would be entitled to a free Career Check, sitting down with a qualified Career Coach and talking through their aspirations and how best to achieve them. A Personal Budget would fund tailored training and other support. Crucially the success of the service would be measured by whether its customers earned more money after support.

The Advancement Service would be funded from existing budgets – this is about refocusing and maximising the impact of existing resources, not new money – and devolved to cities, so they can integrate it with other support.

It would draw on experience from across the country and around the world to deliver a world class service. For example, in the US, trials that helped 45,000 people found that the successful ones boosted people’s pay by $600-1000 per year. They did so by coaching individuals, training, supporting job search, and working with employers.

From getting by to getting on

This shows that it is possible to make a difference. A National Advancement Service, alongside other support to raise the National Minimum Wage, promote the Living Wage and boost productivity, can help people out of low pay.

Britain’s 5 million low paid workers should be at the heart of the General Election debate. And a new National Advancement Service should be at the heart of help to support them.