National Gallery staff protest at "poverty pay" for shift workers at a new exhibition of Van Gogh's 'Sunflowers'. Photograph: Getty Images.
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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
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The promises of Brexit can't be kept. You can only decide which bits to betray

Vote Leave's great success was in presenting a menu of contradictory options as if they could all be secured. 

If Britain leaves the European Union but retains its membership of the single market and the customs union, has it really left? Barry Gardiner doesn’t think so. Labour’s shadow trade secretary, writing for the Guardian, argues that to satisfy those who voted Leave, Britain must regain control of its own borders – forcing it out of the single market in order to lose free movement rights – and its own laws, forcing it out of both the customs union and single market to avoid regulatory harmonisation.

Jeremy Corbyn has argued that single market membership and EU membership are one and the same, as has Caroline Flint. They have kept the options open on the customs union. Are they right?

As I wrote yesterday, it’s hard to explain what drove Britain’s Brexit vote without conceding that objections to the rules of the single market played a significant role. Gardiner is undoubtedly right to say that two of the biggest drivers of the vote were control over borders and laws, both of which cannot be achieved while remaining within the single market. Neither can the third biggest driver, which was more money for public services in general and the NHS in particular – that £350m a week. Because if the United Kingdom retains its single market membership, it will continue to “send money to Brussels”.

There’s a “but” coming, though, and it’s a big one. The first problem is that while the majority of people who voted to leave did so for reasons that cannot be fulfilled if we remain in the single market, those votes weren’t enough to take Britain out of the European Union. Leave only triumphed because it also secured the votes of people who thought it would take the country out of the political project but would retain a Norway-style arrangement.

The second is that those three big mandates cannot be reconciled with each other. If the United Kingdom leaves the single market and the customs union, then the promise of more money for the NHS will be difficult, perhaps impossible, to deliver, at least not in the way that people envisaged. (When people said they wanted £350m extra in the NHS, they didn’t mean “in order to pay for drugs that are more expensive, to recoup the cost of our new regulatory regime and to plug the recruitment gap left by EU citizens with high-priced locums”. They meant that the NHS would do everything it does now and more, not run to stand still.)

The great success of Vote Leave was in presenting a whole menu of contradictory options as if they could be served on one dish. But you cannot have the Extra Hot and the Lemon & Herb on the same piece of chicken. You have to choose. The big failure of the political class has been not to advocate for one of those options over the other. (Theresa May has effectively been running on a ticket of “Extra Hot, Lemon & Herb, and the French will pay for it”.)

You cannot have a Brexit that unlocks trade deals with India and the rest of the BRICS (five major emerging national economies) and reduce the uncontrolled flow of people from elsewhere around the world to the UK. You can’t have a more generously-funded public realm and pursue a Brexit that makes everyone poorer. You have to choose. 

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