Occupations and firms matter

As evidenced by this paper's analysis of cleaners/caretakers, sales workers and personal care workers, both part-time and full-time workers in occupations that require few or no qualifications tend to be low paid. The little research there is also suggests that it is difficult to progress out of these low-paid jobs.

Demonstration projects in the US and the UK focused on employment retention and advancement of sole parent beneficiaries have shown supports can assist sole parents to increase their hours of work and their training but there is little evidence of sole parents advancing to higher paying jobs (see www.mdrc.org). One barrier is that the jobs accessed tend to be in firms where there is little scope to advance. Another barrier, confirmed by this study, is the shallow wage structures of female-dominated occupations. A US longitudinal study found that women are much less likely to move out of low-paid work than men and make up 90% of the persistent low-wage earners (Hartmann, 2004).

In the New Zealand context, personal care workers receive considerably more employer-provided training than sales workers or cleaners. Several factors - including quality and safety concerns and the need to reconsider the roles of the workforce as demand for care increases as the population ages - indicate that there may be scope for this workforce to progress to a recognised higher-skilled role in the future.

Quitting work and working less than full-time reduces progression

Many studies have found that quitting work and/or working less than full-time curtails career progress and reduces wage progression. Part of the reason for remaining low paid is the starting rates of pay that are available to people who are entering or re-entering the workforce after a break. The more breaks from the workforce, the more likely it is that pay will be low (Manning and Robinson, 2005; Francesconi and Gosling, 2005). In the UK, there is evidence of substantial occupational downgrading (moving to a job that requires fewer skills and has less responsibility and pay) occurring when women switch from full-time to part-time work because they are unable to work part-time in their previous job (Connolly and Gregory, 2008). There is also a body of evidence confirming that managers and full-time workers often view part-time workers as less committed and less worth investing in than full-time workers (for example, Tomlinson, 2006).

Several studies have found that skilled women who have breaks from the workforce or choose to work shorter hours gain their best pay prospects from staying with the same employer. Even so, in New Zealand, Crichton (2008) found that most people returning from parental leave reduced their earnings, with one-third experiencing a substantial reduction in earnings. The one-third who started a new employment relationship were much more likely to reduce their earnings. However, the extent to which this represented less hours worked rather than lower hourly pay is not known. In addition, Australian evidence points to women who work part-time having more difficulty increasing their hours of work than men who work part-time (Drago, Black and Wooden, 2004).

Within firms, what works and what hinders women's skills acquisition and advancement

Despite the large literature on effective learning and lifting productivity within workplaces, little attention appears to have been paid to career advancement issues for women in low-paid occupations including cleaning, retail and personal care work.

Literature confirms that, while many factors including better training, employee recognition and reward, innovation and managerial capability contribute to increasing productivity (and thus increasing wages), synergy is important, and attention to single factors alone will not be effective. Moreover, the costs involved in an effective strategy to lift organisational performance mean it will be of limited value to organisations that have a business strategy based on high volume and minimised costs (Harvey and Harris, 2008).

An ability to differentiate services from competitors through lifting service quality is, therefore, one lever to lift training and rewards within industries and is the backdrop to the Union Clean Start campaign for the property services industry. The campaign aims to move the industry from the low-standard low-wage mentality through making it clear that the customer benefits from higher standards (such as better security, cleaner and better maintained buildings) to benefits for firms (lower turnover, lower accident rates) and workers (better wages, training and conditions).

Embedded training - where training is customised to align with the organisational infrastructure, policies and procedures - is a model used for improving workplace literacy and draws on evidence that training is more valued when it is aligned with organisational development and the resulting skills can be applied. A qualitative study of the implementation of an embedded industry training model for personal care/support workers in five New Zealand workplaces (Ryan, 2009) found evidence of benefits for service delivery (such as a greater sense of professionalism, safer work practices), the organisation (such as reduced turnover, attracting better quality job applicants, better matching of workers with clients) and employees (such as improved training outcomes, enhanced self-esteem, greater job satisfaction and better wages).

The barriers to training

In a less than optimistic conclusion about lifting people out of low pay through training, Richardson and Miller-Lewis (2002, p.74) note:

... training and learning is only useful if there are jobs available that will use the newly acquired skills. The decisions that firms make about the skill mix and turnover properties they look for in their workforces has immense social significance. It is clear from theory and from the US and UK experiences, that left to themselves many firms will adopt the low wage, low training, high turnover strategy.

An Australian examination of training and work-life balance issues for low-paid workers makes the point that "changing the labour market situation of low-paid workers needs more than adding vocational training and stirring" and draws particular attention to the problems of:

• employer resistance to training, which might increase labour costs
• employee resistance to training, where the rewards of acquiring new skills are not forthcoming (Pocock, 2009).

The resistance of employees is not a trivial issue, especially in circumstances where it is up to employees to find the time to study and meet the costs of gaining qualifications. A recent New Zealand study found that, on average, a qualification at level 4 or higher on the Qualifications Framework improved participants' earnings by around 7%. However, gaining a qualification at level 3 improved the average earnings of males (by 2%) but not females. Gaining a qualification at level 1 or 2 or completing a limited credit programme did not improve average earnings (Crichton, 2009). Similarly, Australia has found that industry training does not improve women's earnings as much as men's (Pocock, 2009).

Many studies have identified particular problems in raising training levels in SMEs, for example, Richardson and Miller-Lewis (2002), Watson, Meares, de Bruin and Spoonley (2009) and Vaughan (2002). One solution mooted is to provide more off-site learning opportunities (Richardson and Miller-Lewis, 2002).

What more could be done?

Many New Zealand families want to have at least one partner working part-time when they have young children (Ministry of Social Development, 2006), yet there are direct costs to families if a parent who is a skilled employee cannot continue to work at the same level in the same occupation. There are also costs to the economy and costs to government from a lower return on government's investment in education, costs of retraining, unemployment, social services and benefits, and lower tax take.

The OECD amongst others has signalled that, so long as part-time work is seen as the "mummy track", it will always be vulnerable to being low paid with few opportunities for advancement. The literature also indicates that employment disadvantage is not restricted to the period when women are working part-time but also impacts on earnings later in life.

Richardson and Miller-Lewis (2002) note that European countries place much more emphasis on structured pathways for youth from initial low-wage jobs into better paying jobs, which, in turn, means people are less likely to be stuck in low-wage jobs. New Zealand's Learning Representative programme, funded by the Tertiary Education Commission and managed by the Council of Trade Unions with the support of Business New Zealand and the Industry Training Federation, trains workplace delegates to play a leadership role in encouraging workplace learning. Following a pilot phase, it was expanded in late 2008, with a strong focus on foundation skills and literacy and helping learning representatives to develop systems and processes in their workplaces to improve completion rates for industry training and other in-house training and professional development. This is a relatively new programme, which plans an extensive evaluation in 2010.[9]

Currently, much of the policy attention around low pay and low productivity is focused on improving the likelihood that young people gain qualifications and on addressing basic literacy and numeracy skills within the workforce. The findings of this paper suggests there is also a need to look at improving the deployment and skill utilisation of women as well as the training and other pathways that would enable them to move on from low-skilled female-dominated occupations where there is little scope to advance. These strategies are likely to be particularly effective for women with underutilised skills. For other low-paid women, maintaining relativity between the minimum wage and broader wage movements, and attention to other working conditions and benefits, are important supports but are not likely to influence progression. Earlier work by NACEW (2006) also identified the role of government in setting standards for its own contracts - and government is a major purchaser of both personal care (support work) and cleaning - as a mechanism to ensure price competition or profit-seeking that does not undermine desirable standards.