National Gallery staff protest at "poverty pay" for shift workers at a new exhibition of Van Gogh's 'Sunflowers'. Photograph: Getty Images.
Show Hide image

The UK needs better jobs not just more jobs

There are more working than non-working households in poverty for the first time ever. But don't assume a living wage will solve all problems.

It is often assumed that a rising tide will lift all boats and, as the economy grows, some of the benefits will trickle down, hopefully reducing poverty as they go. But JRF research shows that if the recovery is not rich in jobs, the impact on poverty will be muted. And as the CIPID this week warned, ahead of the monthly unemployment figures, jobs growth could yet slow. In addition, not only does the UK need more jobs, it needs better jobs too.

The face of poverty in the UK is changing and in-work poverty has increased over recent decades. The latest data shows – for the first time – that more than half the 13 million people experiencing poverty in the UK live in households where at least one person is working. This is an inconvenient truth for politicians fond of saying work is the best route out of poverty.

Discussion of "better jobs" often quickly turns to the topic of the living wage. That this debate is gathering momentum is welcome, as higher pay is an important part of the fight against poverty. Industries with large numbers of low paid jobs such as retail, hospitality, personal services and care have higher rates of poverty among their workers compared to other industries.

But the relationship between low pay and poverty is not straightforward, not least because poverty is measured according to household income, meaning who you live with - and their circumstances - influences your likelihood of being in poverty. Analysis by the New Policy Institute shows that over half (56 per cent) of adults in working poverty live in households where at least one person is paid below the Living Wage. But that means nearly half do not, so higher pay provides half an answer to in-work poverty.

As well as higher pay, a better job means sufficient hours, security and the opportunity to progress. Part-time work is prevalent among families in working poverty, indicating that more good quality part-time work – especially for those with caring responsibilities – is important too. But the UK has a large number of low-paid and low-skilled jobs compared to other developed countries. Surveys find these workers are more likely to face insecure or temporary contracts and less likely to receive training from their employer, hampering their chances of progressing to a different job.

What is more, many businesses offering low pay and poor terms and conditions are able to survive using a low cost, low quality approach to their business. They have no difficulty hiring people into jobs that require little by way of formal skills and training. However, there are examples of individual businesses in low pay sectors constructing a business case for "better jobs". The precise argument varies, but examples include better pay and progression to reduce the cost of labour turnover and sickness absence; to improve service quality; and to ensure a "pipeline of talent" to support organisational growth.

But such business cases need to be backed by capable managers, an organisational culture that promotes progression and worker engagement. They also need a coalition of champions within the organisation – from senior managers to union representatives and individual staff members – to maintain momentum. Otherwise policies that look good on paper can fail to deliver in reality.

The challenge is how to spread better business practice and drive up employer demand for skilled workers in order to grow the economy and tackle poverty. The government’s City Deal process, whereby powers and responsibilities linked to economic growth and skills and are devolved to major cities, offer an opportunity for more experimentation in this area.

Nonetheless, the IFS projects that poverty will increase by 2020, largely as a result of cuts to benefits for both working and non-working low income families, but made worse by anticipated changes to the labour market. The coalition’s primary answer is to reform welfare to make sure it always pays to work more. This is a worthy goal, but welfare reform alone will not address poverty unless the quality of jobs at the bottom end of the labour market is also addressed.

Katie Schmuecker is Policy and Research Manager at the Joseph Rowntree Foundation

Photo: Getty
Show Hide image

Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.