2020 job market projected to push poverty even higher

Tackling poverty means tackling the weak job market

Research we publish today looks at the impact of the projected job market in 2020 on poverty in the UK. Unfortunately, it’s more bad news. The implication is that we should target jobs and training assistance on the basis of household, not just individual, need and focus unerringly on the creation of more and better jobs.

The research uses a forecast of the type of job market we expect to have in 2020 and combines this with a model of household incomes that includes announced tax and benefit changes. The central forecast for 2020 is for many long-term trends to continue, including shifts towards a knowledge- and service-based economy and increases in high- and low-paid jobs. We already know that cuts to benefits and Tax Credits are likely to undermine the beneficial effects of Universal Credit. This will lead to (in combination with demographic and earnings change) rising poverty rates over the rest of the decade. Adding in an estimate of changes in the job market increases inequality further, although it does offset some of the rise in absolute child poverty.

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So, changes to taxes, benefits, demography and earnings (the blue bars) increase absolute child poverty in 2020 by just over 6 per cent but job market changes (the red bar) offset this a tad. Turning to the relative measure, tax and benefit changes raise poverty by around 5 per cent and the projected job market adds another 1 per cent by 2020. All groups except households headed by someone aged over 65 see rising absolute and relative poverty from tax and benefit changes, with lone parents hit particularly hard. Employment change makes things worse for everyone except for absolute poverty among families with children.

We weren’t naive enough to expect the central forecast to eradicate poverty, so the plan was then to try out some different scenarios that JRF, the research team and our advisory group thought might have a positive impact. These variations were all based on changing the distribution (but not increasing the number) of jobs, and we didn’t vary the tax and benefit system. The second chart shows the impact of some of these scenarios on relative child poverty rates (the long bar shows the predicted 2020 rate of 25.7 per cent).

None of the alternative scenarios (the short bars) have any meaningful impact on that central child poverty projection. Keeping the employment structure as it is now would decrease poverty by a tiny 1.2 per cent. This is the biggest difference. A general rise in qualification levels across the workforce and reduced pay for the highest qualified, for example, actually increases child poverty more than in the central forecast (by 1.0 per cent). Most other scenarios have virtually zero effect by 2020.

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There are two core reasons for this disappointing lack of impact. The first is that low paid and poorly qualified workers, along with women and part time workers, are spread across the whole household income distribution. This means targeting these workers is not an especially effective way of targeting poverty. The second is the huge ‘drag’ on poverty rates of the large number of workless households in the UK.

What do we do about these worrying findings? It is clear that interventions such as training and skills development need to be targeted on the basis of household need, not just individual need if we are to have a serious impact on poverty. It is also clear that we need more jobs. A lot more, because the 1.5 million new jobs included in these forecasts is going to be nowhere near enough when 6 million people in the UK are currently seeking more work.

A child in the Gorton estate in Manchester, where 27% of children live under the poverty line. Photograph: Getty Images

Chris Goulden is deputy director of policy and research at the independent Joseph Rowntree Foundation (JRF).

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Despite its Brexit victory, the hate-addicted right rages on – but the left is silent

The Brexit victors aren’t addicted to independence. They’re addicted to hatred.

The weirdest thing about Brexit is how angry the victors are. You would expect the losers to be sore – but open any British newspaper and it’s as if getting what they wanted has rendered the winners yet more snappish. At any time, you can guarantee that the medium least likely to offer principled opposition to any assault on democracy is the British press. Even so, it’s astonishing to open a copy of the Daily Telegraph and find that a byline has become a mere technicality, a breakwater for the eye. Page after page, countless squads of identical bald clones drone on – all chorus, no counterpoint – ranting about the evils of a Europe, which, in theory, they are supposed to have vanquished.

What is the point of having so many writers when they all write the same article? It turns out that it wasn’t Europe they wanted to leave. It was contemporary Britain. They’re not addicted to independence. They’re addicted to hatred.

In the United States, television and newspaper reporters have understood that their president is out to get them. So they are fighting back, challenging him on his lies in a way that the BBC does not dare. Women, African Americans and Latinos have all staged impressive demonstrations to disrupt the idea that the current state of affairs in the US is either necessary or, more important, normal. Republican senators aiming to take away their voters’ rights to health care have been facing impassioned town-hall meetings. There is exhilarating satire on television.

But over here, the 48 per cent of people who feared a loveless future of cringing isolation, austerity and social backwardness have been largely content to take defeat on the chin, as though cowed by the fact that so many of the poorest among us don’t agree.

In Britain, the silence is eerie. We know from experience that it takes time for artists and film-makers to respond to sudden changes of temperature.

Margaret Thatcher was first elected in 1979, but it wasn’t until 1982 that we were enlightened by Alan Bleasdale’s Boys from the Blackstuff; My Beautiful Laundrette didn’t ­arrive until 1985; and it was 1987 before Caryl Churchill gave us Serious Money – a full eight years after Thatcher’s election.

All three works may enjoy an enduring power and authority denied to the collected speeches of Norman Tebbit. They define the era. But they all came too late to do anything more than raise morale. The damage had been done. You may feel that the musical of Billy Elliot nailed Thatcher’s government definitively, but it began to offer its insights 15 years after her resignation.

Politics in the West is in a mess because no one can answer the question of why Western labour should continue to enjoy its relative privileges when labour in the rest of the world can offer to do our work so much more cheaply. The standard answers from left and right are equally unconvincing and polluted by residual imperialist attitudes to race. Conservatives swing wildly. On some days, they behave as if they can continue to enjoy the free movement of capital while planning to forbid the free movement of labour. On others, they pretend that they still believe in the same market that failed so spectacularly ten years ago.

Neither position is coherent, and the mix of the two is crazy. But the left has done little better to explain how social justice can be advanced in the face of an international buffeting that has no care for workers’ rights.

In 2015, Ed Miliband, the then leader of the Labour Party, went into the general election without having decided whether he was or wasn’t going to defend the Keynesian public spending that had saved Britain from the corruption of the banks. The present leader of the Conservative Party, always marching fearlessly behind a thick cladding of popular prejudice, is implementing a European divorce against which she campaigned only a year ago. Small wonder that people have so little hope of Westminster.

Historically, we have always been taught that change comes from below. When people suffer intolerably, they overturn the cause of their suffering. Yet they still need representatives who can articulate their needs. Revulsion has to bubble up soon, but so do policies.

In our daily lives, we all meet people who are thoughtful, kind-hearted, efficient and serious. We encounter such people in medicine, in education, in law enforcement and in social care, and it is their generosity and foresight that make life worth living. Yet Theresa May is content to hug close individuals who would be thrown out of any job but politics. Her Foreign Secretary, Boris Johnson, was sacked by the Times for lying. Her Transport Secretary, Chris Grayling, was accused of trying to interfere with a prison inspection report while he was justice secretary, and he banned sending books to prisoners.

Most inexplicable of all was the elevation of Liam Fox, her International Trade Secretary, who is in permanent disgrace because he has refused fully to admit wrongdoing for overclaiming expenses and using public money to pay a close friend who attended 57 per cent of his Ministry of Defence engagements without security clearance.

Why on earth are such people promoted by a vicar’s daughter who boasts of her moral values? It is in that disparity between who we are and how we are represented that the best hope of opposition lies.

Disbelief will shade into outrage, even if Labour continues to be led by a man blithely indifferent to the practicalities of getting ­anything done. Confronted with the ascen­dancy of scoundrels such as Fox, Grayling and Johnson, anyone, from any part of the UK, will agree with Karl Marx: shame is the only revolutionary emotion.

David Hare is a playwright

This article first appeared in the 30 March 2017 issue of the New Statesman, Wanted: an opposition