Even if it is generally considered that
low-wage workers should be defined as workers whose wages are below a threshold that is socially acceptable, the difficulty determining what is socially acceptable in an objective way leads researchers and policy-makers to adopt different thresholds. These are expressed as a proportion of the median wage - or sometimes average wage - of all workers.
The Organisation for Economic Cooperation and Development (OECD) defines low pay as less than two-thirds of the median earnings for all full-time workers, and this threshold seems to have gained acceptance in research and statistics in countries such as Austria, France, Greece, Ireland, Italy and Portugal. Sometimes 50 per cent of median earnings, rather than two-thirds, is considered as the threshold for defining very low wages.
The overall factors contributing to low-paid work are, first, part-time work, and second, low hourly wage rates. However, behind these factors are issues related to the individual characteristics of
low-paid workers, of the sectors and establishments in which they work and of the types of jobs they do.
Low-paid workers share similar characteristics across all countries, despite the large differences in the overall incidence of low pay. These are the most common factors reported as influencing low pay:
- The size of establishments (which can often be relevant to the presence and strength of trade unions)
- Sector/industry
- Occupation
- Type of ownership of the establishment (public, private, ‘third' sector)
- Workers' marital status
- Workers' gender
- Workers' age
- Workers' education and skills
- Type of contract
For example, the incidence of low hourly wage rates tends to decrease with age and differs among sexes.
The concept of "
low-waged workers" is similar to the concept of "working poor" – i.e. those who are employed but remain below a defined poverty threshold – but great differences persist. For example,
low-paid workers may live in households with other sources of income, such as the earnings of other household members, or social benefits, and thus avoid poverty. While the evidence suggests that
low-wage employees are considerably more likely than the total population of employees to be poor, the great majority of low-paid workers are not "working poor." Thus, no causal link seems to exist between being a
low-wage worker and a member of the working poor.
(adapted from European Industrial Relations Observatory (EIRO),
Low-wage workers and the 'working poor', visited 2009-05-28)