What does it mean to make work pay?

Increasing the amount of better quality jobs in the UK is key to addressing low pay.

A key argument in the welfare debates this week has centred on ‘making work pay’. The Government argues that changes to tax and welfare will improve the lot of low and middle income working households. Though curiously, this came as suggestions surface the minimum wage could be frozen or cut.

Alongside others, we have shown that the increase in the personal tax allowance is roughly cancelled out by reductions in tax credits and other benefits. But there is a more fundamental flaw in the way this argument has been conducted.  It has focused purely on the role of the tax and benefit system with no discussion of how to make work itself pay.

This flaw was also evident in two other inputs into the debate in the last couple of weeks, both of which were otherwise useful and interesting.

First, a report on Improving Progression in the UK labour market by Policy Exchange. It’s encouraging to see work addressing the core issue of how we support people to not only get work but keep it and progress in it. This will let them end up earning enough to live decently, ideally without needing tax credits. The introduction of Universal Credit gives the opportunity for the Welfare to Work system to address this issue for the first time.  The report estimates that, under the new system, around 1.3 million people will become subject to some kind of in work requirements and support. 

This is a diverse group, with a mixture of ages and family types. Most work between 15 and 24 hours a week and over half are in fairly stable employment. Some have characteristics which will restrict the amount of work they can do: around a third have dependent children, over half are over 45, some are likely to have some health or caring related issues. Nearly 45% also have relatively low or no formal qualifications.  Most are apparently not actively looking for more or better work, although the reasons for this are not clear. The report makes some very sensible recommendations for improving the incentives for Jobcentre Plus and Work Programme providers to give real attention to progression in work. It also suggests piloting various other measures, including greater sanctions, to persuade more people to actively try to increase their hours and pay. 

However, the report seems to assume that there are abundant opportunities for more hours and progression, if people could only be motivated to look for them. This contrasts with our research showing that there are already 1.4 million people who want to work full time but are working part time because no full time job is available, the highest figure in 20 years.

At a Resolution Foundation seminar, Conservative MP and Skills Minister Matthew Hancock set out his agenda for tackling low pay. He argued that actively tackling low pay was vital and set out three ways of doing so: defending and strengthening the minimum wage; creating a tax system which supports low paid workers; and increasing productivity - by freeing businesses to compete, having good matching of jobs to applicants and increasing skills and human capital.

Both Mr Hancock and the seminar respondents (Allister Heath, City AM editor, Nicola Smith of the TUC and Ryan Shorthouse of Bright Blue) agreed that increasing the amount of better quality jobs in the UK was key to addressing low pay. But there was almost no discussion about how to do this. The debate was all about supply-side measures – tax, benefits, skills. All this is vitally important, but is highly unlikely to work without getting to grips with the demand side.

Only then can work truly pay – giving the ‘hard working families’ politicians talk so much about a real chance for independence and security.

Photograph: Getty Images

Helen Barnard is a Policy and Research Manager for the Joseph Rowntree Foundation.

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The good, the bad, and the meaningless: Jeremy Corbyn’s “digital democracy” decoded

The Labour leader has promised to “democratise the internet” but which parts of his manifesto would actually work?

Jeremy Corbyn has promised to “democratise the internet”, speaking this morning at the launch of his eight-point digital manifesto at Newspeak House in east London.

“Labour under my leadership will utilise the advances of digital technology to mobilise the most visible general election campaign ever,” said Corbyn, in a clip you might have watched via a livestream on his Facebook page, before it crashed.

His manifesto sets out how Labour hopes to democratise the internet so that “no one and no community is left behind”. Unfortunately, some of the terminology used isn’t so universal. In a bid to leave no one behind, we thought we’d decode the manifesto here.

The good

Universal Service Network

It’s hard to argue with Corbyn’s first and largest proposal – that high speed broadband should be accessible across the country. According to the Labour leader, this would cost £25bn to implement and would be funded by his proposed National Investment Bank, “at minimal cost to the taxpayer”.

Although this is good idea, it isn’t a new one. The Conservatives already announced plans for a similar Universal Service Obligation (USO) in March, whereby everyone has a legal right to request download speeds of at least 10Mbps. A report published by Ofcom last week shows the government faces resistance from internet service providers who don’t want to pick up the extra costs.

The People’s Charter of Digital Liberties

Corbyn’s second most eye-catching suggestion, a digital bill of rights, is a win for anyone wary of Theresa May’s Snoopers Charter. He promises to protect personal privacy and “[enhance] the on-line rights of every individual”.

Platform Cooperatives

Corbyn hopes to “foster the cooperative ownership of digital platforms for distributing labour and selling services”, which essentially means he wants services like Airbnb, Deliveroo, and Uber to be community-run (or, if you want to go there, nationalised). The National Investment Bank would fund these websites and apps, which in turn would allow greater regulations of employment contracts. It’s quite a utopian vision and it's easy to be cynical about how this could work in practice, but were it to work, it could arguably transform the entire economy. 

The bad

Digital Citizen Passport

“We will develop a voluntary scheme that provides British citizens with a secure and portable identity for their on-line activities,” claims the manifesto, explaining this can be used to interact with public services like health, welfare, education and housing. Without even considering any potential security or privacy issues, the largest criticism of this proposal is that it already exists, as Gov.uk’s Verify.

Programming For Everyone

By encouraging publicly funded software and hardware to be released under an Open Source License, Corbyn dreams of a world where everyone can share code and learn from one another. Unfortunately, this opens up multiple privacy and security concerns, and Corbyn's other suggestions for teaching code also already exist, as the EU’s All You Need Is (C<3de) programme. 

The meaningless

Open Knowledge Library

At first glance, Corbyn’s proposal for a “free-to-use on-line hub of learning resources for the National Education Service” is undeniably a good idea. The problem is that the idea ends there, with no real discussion of what it is and how it will work. At present, it simply sounds like a publicly-funded version of resources that are already available (Wikipedia, anyone?).

Community Media Freedom

The entirety of this policy basically boils down to “free speech, yo”, which is, unarguably, fantastic. Unfortunately, the manifesto offers little in the way of explaining how its goals, such as stopping the “manipulation of software algorithms for private gain”, will actually be achieved.

Massive Multi-Person On-line Deliberation

Corbyn’s plan to “organise online . . . meetings for individuals and communities to deliberate about pressing political issues and participate in devising new legislation” is Twitter. It’s just Twitter.

The extras

Outside of this eight-point manifesto, here are some other things we learned today about Labour’s digital plans:

  • According to Corbyn, some MPs don’t turn on their computers because they do not know how to, which, honestly, shall we deal with that first?
  • Team Corbyn hopes that technology – and the visibility it allows – will be Labour’s "path to victory", which is nice, but what he really means is: memes.
  • Corbyn reveals he has an “open mind” about nationalising the broadband network.
  • Corbyn calls online abuse appalling and says that Labour is chasing down offensive material.
  • A team of coders called Coders for Corbyn have released some digital tools to show your support for the leader. Yes, the Corbyn emoji  Jeremoji  is about to be a thing.
  • The entire manifesto features “online” written as “on-line” and really, that is the real issue here.

Amelia Tait is a technology and digital culture writer at the New Statesman.