We’re all managers now

Job title inflation has been a growing phenomenon in recent years, with an increasing proportion of people with senior sounding job titles still earning middle-ranking wages, according to new research published today for the independent think tank the Resolution Foundation. The research finds that the proportion of managers in the retail sector earning below £400 a week increased from 37% to nearly 60% during the 2000s.

The research, by respected Oxford academics Craig Holmes and Professor Ken Mayhew, investigates the idea that in recent years the UK labour market has split into high-wage “lovely” jobs and low-wage “lousy” jobs, while jobs in the middle have disappeared. The research finds that while many middle level ‘routine’ occupations such as process operators in industrial plants have indeed disappeared,  jobs on middle pay do still exist – but are now more likely to be given higher status titles such as ‘manager’.

The report does support the general finding that both low and high pay work in the UK increased during the 2000s. But it challenges the idea that this has been predominantly driven by the hollowing out of jobs in the middle. The report finds that by far the biggest impact on wages has been increasing levels of education supporting wage growth for top earners, and a growing decline in trade union membership dampening wage growth for those on lower pay (although the national minimum wage has protected wages at the very bottom).

As well as confirming that wages have grown fastest for those in top jobs, the research finds a growing gulf between the very highest earners – whose wages have grown faster still – and the vast majority of high level jobs. While the wage premium has remained fairly constant for most graduates, it has risen very fast for the top 20% of earners, and actually declined for those just below this.

Vidhya Alakeson, Director of Research at the Resolution Foundation said: ‘what is really interesting is that jobs with middle pay do still exist, but with seemingly inflated job titles. It is still true however that we have seen growth in high pay and low pay jobs over recent years, which risks those who would traditionally have gone for middle level jobs being pushed down into low pay’.

Author, Craig Holmes said:  ‘As traditional middle skill occupations are in decline, it seems increasingly likely that even well-qualified labour market entrants unable to find good ‘non-routine’ jobs will be found working in low-skill, low-wage occupations. Policymakers are naive if they expect employers to up-skill jobs just because the supply of highly-qualified workers has grown’.

NOTES TO EDITORS 

Craig Holmes is a Research Fellow at the ESRC Centre on Skills, Knowledge and Organisational Performance at the University of Oxford and Professor Ken Mayhew is a Professor of Education and Economic Performance and Director of the ESRC Centre on Skills, Knowledge and Organisational Performance at the University of Oxford.

The research finds that the proportion of managers in the retail sector earning below £400 a week increased from 37% to nearly 60% between 2000 and 2008, adjusted for inflation at 2000 prices. In financial services, between 2000 and 2008, the proportion of managers earning less than £400 a week grew from 24% to 30%, although those earning over £1,500 a week also increased from a couple of per cent in 1993 and in 2000, to 10% in 2008.