Resolution Foundation warns of “promotion blockage that risks permanently scarring the earnings of a generation of young workers”

28 July 2015

The Resolution Foundation has found that falling rates of job mobility (the rate at which individuals move between jobs) may be having harmful consequences on career progression within the UK labour market.

A recent report ‘A Steady Job?’ published by the Resolution foundation has found that job stability, measured by median employment tenure, has been rising over the past two decades. The report recognises that the result of “a combination of financial incentives, support with childcare and employment legislation” has led to welcome changes within the labour market, including women returning to the same employer after having children and older people staying in employment for longer.

However, as people continue to remain in the same job for longer time periods than previously, the opportunity for job movements has fallen. This has restricted the potential for workers to capture the benefits of a fluid labour market, namely higher wages, the prospect of promotion and improved productivity, as many lack the ability and opportunity to progress their careers. With the current rate of job mobility yet to return to pre-crisis levels, the report suggests that younger workers are disproportionately disadvantaged, with the research finding the typical earnings of those born in 1983 approximately £2,800 a year lower than their counterparts born in 1978, whose early careers narrowly avoided the fall in job mobility levels.

Report co-author Paul Gregg, Professor of Economic Policy at the University of Bath warns that whilst job security is “crucial to the pursuit of full employment… we should also be mindful about the falling rate of job moves, which are a vital way for young workers to build careers” and the growing potential of such changes to “permanently scar their earnings”.

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