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The Entry Level Struggle

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In February an employee from Yelp’s Eat24 food ordering app caused quite the stir when she wrote an open letter to the CEO. Talia Ben-Ora’s letter detailed the irony of how she was struggling to afford to eat when working for the multibillion-dollar business. She was fired the same day. The internet exploded – some supporting, some hating, but everyone with an opinion on who’s responsibility it is to fix the problem with entry level jobs.

Yelp aren’t the only tech company under scrutiny for their wage distribution, and compensation for comparable positions are not consistently higher than Yelp. The reality is that many customer service support positions are paid significantly less than what is arguably needed to live in such an expensive city. These entry level support roles are sold as a good way to break into the business, a way to learn essential skills and quickly transition into different departments. Generally though this will take at least a year – a year of scrimping on everything possible, having side jobs to afford rent, or possibly having to move back home. In this situation it won’t take long for the reality of living in one of the world’s most expensive cities to catch up with you.

In the UK there are fears of an imminent job crisis as businesses continue to struggle to recruit entry-level labour. The key problem is the high cost and low availability of housing is having a knock on effect on the ability to recruit employees on lower wage jobs. According to CBI’s 2015 poll of London businesses, 33% of companies say employees are often having to leave jobs because costs are simply unmanageable. On top of this employees on low pay are being pushed further and further into the city’s suburbs where their time and money is taxed even more by longer commutes and expensive transportation.

So who’s responsibility is it to address the crisis? If you are hiring entry level employees in London or San Francisco should you be paying enough so employees can live comfortably in the city, or should these employees be more careful in considering living costs and perhaps choosing a city where the same wage will stretch much further? Should respective Governments increase minimum wages to match living wage or impose caps on rent? Or should the focus be on building affordable housing on a large scale?

There have been many warnings over the skills shortage at the top end of the job market, but in big cities this could easily creep into entry level jobs too. Tackling the housing shortages that affect cities including London and San Francisco is a good a place to start as any. It’s a vicious cycle but failing to provide enough affordable homes stifles the potential for companies to grow and hire. Affordable housing in city centres makes rent and travel more manageable for the employees on lower wages or just starting out, meaning entry level positions could actually be practical.

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