Public policy for addressing the low-skills low-wage trap: insights from business case studies in the Birmingham city-region, UK

Abstract

ABSTRACT The idea that some local areas are characterized by a low-skills equilibrium trap is prominent in academic and policy debates in the Global North. Factors shaping this position and associated implications for local economic development are only partially understood. This paper provides new evidence examining employers’ decision-making around investment and workforce management in the hospitality and retail sectors in the Birmingham city-region of the UK, and their experience of the low-skills low-wage trap. The findings highlight intersecting sectoral and place-based factors in the emergence of, and barriers to escape from, this position. Responses require policy actions at firm, local and national levels.