IN recent months, a number of positive signs have been indicating a return to economic growth in the UK. This has resulted in questions being asked about what sort of recovery we are experiencing – whether it is benefiting all parts of the UK and whether it will be sustainable.
But there is a further question we should be asking: what will the recovery do for people living in poverty?
In the city of Leeds, it is estimated that around one in five families is experiencing poverty. That means 65,500 families in Leeds struggling to balance their budgets every week and being forced to choose which essential items to do without.
It is often assumed that a rising tide will lift all boats, and as the economy grows the benefits will trickle down, reducing poverty as they go. However, we should know from the period prior to the recession that this is not automatically the case. New JRF research published today shows many economically successful cities had static or even growing rates of poverty, even during periods of strong economic growth.
The research does however show that job creation appears to have a more significant and immediate impact on poverty. This is perhaps not surprising – after all, our politicians frequently tell us that work should provide a route out of poverty – and so it should. However, the sad fact is, more than half of people experiencing poverty in the UK live in households where at least one person is working.
This points to a serious problem that needs to be addressed. Not only do we need to make sure that those out of work and able to work are supported to do so, but we need to ensure that work genuinely lifts people out of poverty. In short we need not only more but better jobs.
Discussion of job quality often quickly turns to the topic of the Living Wage – that is a voluntary higher rate of hourly pay, calculated according to a basic cost of living (currently £7.65 compared to £6.31 for the minimum wage). In Leeds just under one in five of all workers in the city are paid below the Living Wage. More employers committing to higher pay is an important part of the fight against poverty – not least because industries with large numbers of low paid jobs such as retail, hospitality and care have higher rates of poverty among their workers compared to other industries.
But improving the quality of jobs does not simply mean employers paying the Living Wage. It means jobs that offer security, sufficient hours and opportunities for training and development so workers can progress to a better job. But those working in low paid, low-skilled jobs are more likely to face insecure or temporary contracts, and less likely to receive training from their employer. There are also a large number of people currently working part time who would rather be working full time, but cannot find a suitable job.
In recent years, both Labour governments and the coalition have looked to drive economic growth by devolving powers and responsibilities to large cities like Leeds and their surrounding city regions. JRF research suggests this is a good direction to be going in. But as the city region takes on more responsibility for supporting the development of industries that offer good prospects for future jobs and growth, we must also seize opportunities to make poverty reduction a more integral part of local growth strategies.
What this looks like in practice will be different in different cities. For example, it could mean working with employers to raise their ambition, their demand for skills and the quality of their jobs through improved management practice and organisational growth.
It could mean supporting training providers, trades unions and employers to collectively establish learning and development pathways in different industries, so someone starting out in a low-paid, low-skilled job can see clearly how they could progress to a better job in future. Or it could mean looking at transport planning to ensure people living in deprived areas are able to access new jobs in the city region and ensuring welfare to work provision supports people into jobs they are well suited to.
Leeds City Council and Leeds City Region have recognised the importance of these questions, which is why we are collectively launching the More Jobs Better Jobs Partnership today. The aim is to better understand the relationship between poverty and the economy at the city regional level, and to work together to identify what can be done – and by whom – to create more and better jobs to lift people and places out of poverty.
Katie Schmuecker is a policy and research programme manager at the York-based Joseph Rowntree Foundation.