Rising minimum wage may have protected low earners from the not-so great British training decline

The share of employees receiving off-the-job workplace training has fallen by 30 per cent over the past two decades, from 9.8 per cent to 6.9 per cent. But while some might have expected low-paid, and generally lower trained, workers to have borne the brunt of this decline, in fact it has been driven by higher-paid workers, according to new research published today (Thursday) by the Resolution Foundation.

In its latest Labour Market Outlook, the Foundation examines two damning skills trends in Britain – a 30 per cent fall in off-the-job training between 2000 and 2022, and the fact that just one-in-twenty lower-paid workers receive it.

Based on these two trends, there is a risk of this not-so great British training decline being concentrated among low earners, particularly if the ramping up of the national minimum wage across the past two decades (including an almost 10 per cent rise this month to £10.42) caused firms to offset these higher wage costs by reducing training costs. Studies have suggested that this has happened in countries including Germany and Japan.

However, while low-paid workers are far less likely to receive off-the-job training than those in higher-paid positions, the Foundation’s analysis shows that this ‘training gap’ has actually narrowed over the past two decades. Levels of training for low-paid workers have fallen, but at a much slower rate than levels of training among the higher paid.

In 2003, the highest-paid quartile of workers were 2.4 times as likely to receive training from their employer as the lowest-paid quartile. By 2019, this had fallen to 1.9 times, and by 2022 to 1.6 times.

Digging deeper, the new Labour Market Outlook finds employees who are paid at the wage floor have if anything received more training than those who are paid slightly above the minimum wage. Indeed, if a range of factors such as age, sex, and job type are accounted for, workers covered by the minimum wage were in fact 12 per cent more likely to receive training between 2011 and 2019 than those earning above the minimum wage.

This evidence is consistent with a more positive secondary effect of a higher minimum wage – that firms are seeking to boost worker productivity in response to the new wage rates, with the provision of training likely playing a role in this strategy.

However, while it is encouraging that levels of training for low-paid workers have not fallen as fast as among the higher paid, the Foundation notes that closer attention should also be paid to the type of training that employers are offering, as well as to the number of employees that are receiving training.

This is especially important when looking at low-paid workers and workers without a degree: lower-qualified adults are more likely than higher-qualified adults to undergo health and safety training, rather than training designed to boost skills or support career progression.

Finally, the Foundation says that the small but significant narrowing of the ‘training gap’ does not change the bigger picture – which is that overall off-the-job training levels are too low and there remains a large ‘training gap’ between high and low earners.

This widespread decline in workplace training is bad for individual workers, holding back their careers, and bad for the country as a whole, dragging on productivity and ultimately living standards.

Hannah Slaughter, Senior Economist at the Resolution Foundation, said:

“Access to the right kind of training is essential for raising workers’ productivity, as well as boosting their career progression and earning power.

“But UK firms’ record on this is dire – they have overseen a not-so-great British training decline, with a 30 per cent fall in off-the-job training since the early 2000s.

“There is some good news amidst this bleak training picture however. Low earners have been somewhat sheltered from this decline, with a rising minimum wage seemingly putting firms off cutting back their training to the same extent as higher earners.”