By Claire West
A focus on job entry alone is not enough for the Coalition to meet its targets for benefits savings and poverty reduction, according to a new report from The Work Foundation.
The report argues the government must look beyond worklessness to expand opportunities for around ten million workers already struggling on less than £15,000 a year.
Welfare to What? Prospects and challenges for employment recovery is the first report from The Work Foundation’s Bottom Ten Million two-year programme, which examines in-work poverty as both a serious social injustice and a major hindrance to the UK’s economic performance. With the greatest falls in employment during the recession concentrated in the largest low-wage sectors and jobs, the Bottom Ten Million remains the group most vulnerable to wage reductions and job insecurity.
The report sets out the labour market challenges cities and towns currently face and includes maps showing job density, claimant rates and hotspots of the UK’s lowest wages. The report concludes by outlining what policy makers need to do to tackle these issues.
Naomi Clayton, lead author of the report said, “There is an urgent need for quality, lasting jobs that provide opportunities for development and progression. The regional and local divisions in jobs cannot be addressed without tackling the Bottom Ten Million. In places such as Blackpool, Grimsby and Hull, a third earn less than £7 an hour. Without more, better-paid jobs, long-term sustainable regeneration in these places will not be possible. In such depressed local labour markets, lack of labour demand creates and reinforces social problems, further reducing individuals’ chances of securing sustainable, quality employment.
“Both the geography of the recovery and the public spending cuts are likely to widen regional disparities and exacerbate the problems of low employer demand at local level. Based on the pace of regeneration in local areas, a balance must be struck between increasing individual mobility in order to widen access to job opportunities, while seeking to rebuild the economic base to increase the number, quality and sustainability of local jobs.”
The latest labour market figures show the growing impact of public sector cuts and, as predicted, little recovery in manual and semi-skilled jobs. With signs of increased polarisation in the jobs market set to worsen social mobility, the authors claim a sustained effort is needed to address the deep rooted structural problems in the labour market. Without this effort, the mismatch between new jobs and existing skills will leave people trapped in insecure, low wage employment or pushed out of the labour market altogether.
Naomi Clayton added, “Policy makers need to consider a wider range of measures, used in parallel with the National Minimum Wage and working tax credits, to combat in-work poverty. The UK has built up a strong network of labour market intermediaries helping people find better jobs and develop skills. Sustaining and strengthening these networks for the Bottom Ten Million will be a key part of any future strategy and will have to be backed by sustained public investment.”
The report also calls on the government to ensure local authorities and their partners have the flexibility, including greater budgetary control, to shape labour market policy and customise interventions in a way that responds to local circumstances. In addition, it states that policy makers need to understand how to manage public sector cuts while rising to other strategic challenges, prioritising and taking decisions about where costs will be reduced with a clear vision of the desired outcomes for service delivery across public service providers.