The question of why workers stay in jobs where they are treated poorly is a complex one that can reveal important insights about the functioning of an economy. While some reasons for staying in such jobs may be evident, such as legal constraints or limited alternative opportunities, there are also more nuanced factors at play.
In the case of the United Kingdom, where unemployment has been historically low, a report by the Low Pay Commission (LPC) found that illegal underpayment of workers has persisted. Even when better options are seemingly available, a significant number of minimum-wage workers continue to be underpaid.
Fear appears to be a key factor that keeps workers in bad jobs. Many individuals are afraid that their next job could potentially be worse or short-lived. Building job security in the UK can take time, as various benefits and protections only become accessible after a certain period. Additionally, securing stable work schedules that align with childcare and other responsibilities can be challenging, especially in low-paid jobs with prevalent zero-hour contracts.
Transportation limitations also contribute to workers' restricted job options. Minimum-wage workers are more likely to rely on walking or public transportation, which can be both time-consuming and expensive. For example, commuting to Manchester airport for early morning shifts may take significantly longer by public transport compared to driving.
The welfare system further impacts workers' decisions to leave bad jobs. Changes in income can affect the amount of universal credit received, often in unpredictable ways. Moreover, transitioning to jobless benefits can be financially challenging, as UK unemployment benefits are among the lowest in the OECD. The system also imposes sanctions on individuals who leave jobs without a "good reason," and illegal underpayment may not always be considered a valid reason.
These interconnected factors create a cumulative effect that reduces flexibility in the UK labor market, particularly for workers in low-wage positions. The LPC's experience reflects a situation where workers express reluctance to change jobs due to perceived risks, while employers struggle to find suitable candidates. Thus, policies that provide workers with more security, such as predictable schedules and enhanced employment rights, may not necessarily decrease flexibility but rather alleviate fears and concerns, benefiting both workers and employers.