By Guest
Chris Goulden is the Policy and Research manager at the Joseph Rowntree Foundation who are launching a new project looking at the future of the labour market and how it might impact on poverty. It’s a perfect start to today’s debate - on why so many people are working but still in poverty.
People who aren’t children or pensioners are a mixed bunch. There are between 5½ and 7½ million people of working age in poverty in the UK, depending on what measure you want to use. Of these:
- Nearly one in five is aged 55+ with no dependent children.
- One in nine is of ‘Asian or Asian British’ ethnicity.
- Only one in twenty is a young parent aged 16 to 24.
- One in three has a disabled adult or child in their household.
- Single childless women have experienced the biggest rise in their risk of poverty over the last ten years; single parents have experienced the biggest fall.
These diverse factoids show that, in truth, it’s unlikely that any single national policy change would be enough. There needs to be sustained action and targeted help to have a significant impact on poverty.
Nevertheless, increasing the number of good quality jobs is crucial. About one-half of working-age adults in poverty are in families where there is at least one part-time worker. In-work poverty was steadily creeping up before the recession. And as today is ‘in-work Monday’ on the blog, I thought I would tell you what JRF’s recent research projects say about low-paid, insecure jobs and what could be done about this problem.
A fifth of poverty overall is ‘recurrent’, where people get trapped in a cycle, gaining employment but losing it again quickly. They are bumping along the runway but never taking off. This is caused in part by parallel cycles between unemployment and low-paid, insecure work; a phenomenon that has risen by 60% since 2006. Age, occupation and family change, such as relationship breakdown or a new baby, also drive cycles of poverty but job conditions remain the strongest factor.
Decisions that employers make about how they arrange their workforces are vital. Many have businesses in competitive sectors of the economy that need to respond to fluctuations in demand caused by seasonal factors (agriculture, tourism) or by the uncertainty of contracts (public services, grocery trade). Employers are able to make the most of the abundant supply of low-skilled labour in the UK, as well as the preferences of some groups – especially mothers – for flexible, part-time employment.
What our research by NIESR indicates is that the choice of how many temporary workers to use seems to be more a result of employer ethos than one of concerns for efficiency or profit. This means employers could address levels of insecure employment in low-paid sectors without adversely affecting their business. But it would take much more than even this substantial change in attitudes to deal with the low-pay/no-pay cycle in the UK labour market.
Other research in our programme looked at things from the perspective of those caught up in this cycle, often parents. The experience was universally one of frustrated ambitions. The availability and cost of childcare was a particular barrier. Recent suggestions in the Government’s White Paper to provide funding for childcare whilst parents undertake training and a trial of a new low-cost loan scheme for up-front childcare costs seem like good ideas. Another recommendation arising from our research was to implement the EU agency workers directive, which has now been laid before the UK Parliament.
Bigger factors are at work however. These developments are occurring against a backdrop of a ‘hollowing out’ of the labour market in the UK with fewer jobs in the middle and a growth in demand for both lower- and higher-skilled occupations. The impact of this continuing trend on poverty and inequality among working-age adults is uncertain. It could well mean reduced scope for people to climb the career ladder to escape poverty.
This is why we have agreed to jointly fund a major new research programme to provide a clearer basis for policy in this area. The programme will estimate the likely scale of poverty and inequality in 2020 based on what the labour market is expected to look like. This will draw on what we can learn from other countries (not just in Europe) and a better understanding of how training and skills can be linked to jobs, progression and ultimately people’s incomes and the levels of poverty and inequality in society.
If you are interested in learning more about the programme on the future labour market as it unfolds, you can sign up for email alerts here.
This post is part of Community Links and Church Action on Poverty‘s project looking at working age poverty, contributing to the European Year Against Poverty