Work has been the biggest anti-poverty policy of recent decades, with support delivered under banners of ‘making work pay’, and calls for people to ‘work their way out of poverty’. However, people living in poverty are increasingly likely to be working. The UK’s wage fall since the 2008 financial crisis has been unmatched by any other large economy. This will be exacerbated by the Universal Credit roll out. Families are being pushed into financial hardship and work incentives damaged, particularly for second earners, single parents and those moving into self-employment.
Whether the focus is on stagnant or falling wages, rising prices, use of zero hour contracts, self-employment, impact of automation or retailers’ warehouses – work has barely been out of the news in recent years. The last decade has seen significant changes in the way we work at the same time as systems set up to provide support through social security payments and skills training have been cut. The most effective way to increase earnings is to move jobs, but doing so requires confidence in the social security safety net. A confidence that has been eroded by cuts and conditionality.
Employers are facing a number of competing demands from consumers, their employees, Government and the wider economic impacts of policy, particularly Brexit. Some sectors are under significant pressure from new businesses with new ways of working. Flexibility and insecurity are becoming interwoven as employers defend their on-demand payment models as facilitating flexible working. But they can also lead to a lack of breaks, below minimum wage earnings and, in some cases, to court.
Just over 1 in 5 (21% or 5.7m) people are in low paid work. New polling commissioned by Child Poverty Action Group, out today, shows that 47% of working parents with an annual household income under £30,000 say they don’t have enough money to support their families. The temporary workforce in the UK is also significant. Groups disproportionately represented in the ranks of the low paid include women, young people, part-time workers, temps, those in low-skilled work, and people in the retail, hospitality and care sectors.
Changes in support systems often appear to have been conceived in a vacuum – not taking into account changes in the labour market. There is also a lack of access to training, with many low-paid workers now expected to fund their own through loans. This ‘risk swap’ combined with significant cuts to the Further Education budget has seen a fall in the number of adults accessing education and training. As the gap between the two grows, so the lives of many people with a foot on both sides of this chasm become increasingly precarious.
The Taylor Review focused on ‘good work’. While there is significant evidence of the value of work for both physical and mental wellbeing, the quality of that work is central - ‘bad work’ is worse for health than unemployment. There is little analysis of the types of jobs people take and their impact on poverty. Carnegie Trust and the RSA are in the process of considering what national quality measures would look like.
Replicating good practice in the supply chains of organisations is critical to the experience of the most precarious workers. It was telling that for many of the employers interviewed for Britain Works, those working under the poorest terms and conditions did not work for them directly – but were part of an outsourced team; working for an agency (in some cases for up to two years); or part of an acquired business. All were unaware of the details of the employment of those working in their supply chains. Little strategic thought was put into their lower-paid workforce, focusing much more on the higher-skilled positions.
Customers have an important role in holding companies to account. It has long been the argument of some low-paying retailers that low pay is necessary to ensure low prices (although large executive pay packets point out the hollowness of this argument). Nonetheless, the role of consumerism and expectations regarding prices, ‘free returns’ and immediate delivery are important drivers of retail. Similarly the increasing cost of social care, the importance of paying carers well, and the implications for taxpayers is a subject that struggles to gain traction beyond the tabloid horror stories of a ‘death tax’ or the botched Conservative manifesto.
Work is changing, and with it there is a shift that moves power even further from low-paid workers. Traditional support systems including social security, advice services and adult skills have been cut. Effective, sustainable support for low-paid workers needs a broad focus – on pay, on benefits, on skills, and on childcare. The challenge is to build a coalition of workers, employers and policy-makers to design and deliver it.
Britain Works will facilitate and promote a wide and open discussion about how to improve the experience of work for low-income families in the UK, and the employers they work for. Britain Works is an open invitation to employers, workers, and researchers to join us to examine what we can do to ensure more parents can move into good work, progress within their jobs, balance their work and family life, and share the rewards of work with their families.