Archives for the month of: January, 2014

By Daniel Silver and Amina Lone, The Social Action & Research Foundation

There has been much discussion recently about the issue of in-work poverty in the UK. To have any chance of transforming the lives of people on low pay, we need to reveal the complex dimensions of poverty and make visible that which is often neglected in mainstream debates. Highlighting the high representation of ethnic minorities in low paid work, we must not forget how people from different backgrounds are affected in different ways.

The nature of poverty is changing and today more people living in poverty are working than are out of work. The injustice of low pay is increasing throughout the UK – since 2009 the number of workers earning less than a living wage – the amount considered adequate to achieve a minimum standard of living – has mushroomed, from 3.4 million to 4.8 million. One woman who is supported by Wai Yin Chinese Women Society explains that “my husband and me work six days per week, ten hours per day, just to manage our daily living. We only can work in Chinese restaurants, because we cannot speak English”

Austerity has contributed towards this, but clearly poverty existed before the collapse of Lehman Brothers and there are persistent structural inequalities that reach deep into the heart of our society which need to be dealt with. To have any chance of transforming the lives of people on low pay, we need to reveal the complex dimensions of poverty and make visible that which is often neglected in mainstream debates. One of these complexities is the clear connection between how levels and experiences of poverty are affected by people’s ethnic identities. We can see this through stark facts which show that young black people are more than twice as likely to be unemployed compared to young white people and almost half of all Bangladeshi and Pakistani workers in the UK earn less than £7 an hour.

Around two-fifths of people from ethnic minorities live in low-income households, twice the rate for white people, although there are also clear variations by ethnic group and gender that must be considered. Furthermore, there are also geographical dimensions to this, as although people from ethnic minorities are more likely to be in income poverty than white British people wherever they live, evidence shows that the extent of the difference is much greater in inner London and the English north and midlands than elsewhere. The evidence is clear, but as Stephen Crossley asks: are ethnic minority workers in low paid jobs hiding in plain sight?

The high representation of ethnic minorities in low-paid work means that those who seek to address the issue of low pay must consider how people from different backgrounds are affected in different ways. At the same time, anti-racism campaigners need to consider the scourge of low-pay more centrally. As local Manchester activist Tony Wright says “It is beyond black and white now, and is also about the colour of money.”

The Joseph Rowntree Foundation is currently undertaking a far-reaching programme to better understand the relationship between ethnicity and poverty which will be published this spring. This has included an in-depth look into a range of issues. For instance, the research showed that social networks can provide an essential safety net, but at the same time can limit people within circles of their own communities, which can serve to reproduce inequalities by providing important access to employment, but that is often restricted into low paid jobs which relied on informal recruitment processes. Research into the relationship between caring and earning reveals the impact of caring for children, disabled children and older relatives that demands more flexible working patterns in order to be able to provide the necessary balance, but can trap people (predominantly women) into low paid and part-time work. Finally, the JRF’s research into the impacts of employer behaviour and the nature of local labour markets clearly provides further evidence which shows that discrimination continues to have an impact on people’s life chances, particularly those on low-pay.

These results point to a complicated picture of poverty and racism in the UK and provide policy-makers and communities with more knowledge on how to change things for the better. The campaign for a living wage is an important strategy for improving the position of low paid workers, but for it to be truly transformational there must also be a consideration of how the labour market currently disadvantages people from ethnic minority backgrounds in terms of trapping them into low paid work.

The JRF’s research shows us the importance of access to good jobs and progression opportunities once people are in work. Within this, the intersecting dimensions of ethnicity and gender must be considered throughout. As Fran Bennett points out: ‘workers who are female, part-time on temporary or casual contracts and working in the private sector are at greater risk of low paid work.’ More secure positions are needed for the many women that are often forced into taking on part-time and low paid work in order manage their caring responsibilities and survive daily life. The very nature of work must change to become more flexible for workers and not just employers, while affordable childcare needs to become more accessible for all communities, particularly those on low pay. Beyond this, more value must be placed upon the role of unwaged caring in our society; anti-poverty strategies have to recognise that employment alone must not be the only approach, as many women rely on access to non-income resources to maintain financial security and are being further exposed by austerity.

The beauty of the Living Wage campaign is the simplicity of its message: that everyone deserves to be paid a wage that can ensure a decent standard of living. But for it to be truly successful, it must not forget the complexity of inequality and poverty that we face in twenty-first century Britain.

By Warren Escadale, Policy & Research Manager, Voluntary Sector North West

George Osborne announced on Monday (6th January) his intention to ‘Finish the Job’. I’d just like to be clear about what this means and how it will affect the North West. 

Just one month ago the chancellor presented the Autumn Statement which, for the first time in this parliament, presented the last section of the path to balanced finances and fiscal prudence. It stated that by 2018/19, we will start paying off the national debt and will be at a prudent, manageable, crisis-free, point in our national finances.

On Monday he said that the goal is to further cut welfare spending and then to cut taxes for “hard-working people” (which was later spun as hard-working low-income families). In short, funding for the very poorest and most in need will be taken away and will be redistributed to tax payers. I think there’s two things to note here. Firstly, it is hard to see how such a tax cut will be targeted in order to particularly benefit low-income families rather than everyone except those that don’t pay enough tax. Even if we think this is a good model of social responsibility, the continued use of the phrase hard-working low-income families needs to be watched and challenged. This is nearly as misleading and belittling as poverty being equated with benefit scrounging. 

Secondly, there are geographical implications to such redistribution. It’s not as simple as north-south, but it does move money away from families and communities affected by poverty and move it to families and communities that are succeeding. Money will move away from individuals and families where markets work poorly and move it to areas blessed by the markets. Simply put, the winners win and the losers lose; the bigger the winner the bigger the win, etc. And this has genuine geographical implications. Without saying it, we’re being asked to endorse, as part of ‘The Job’, a managed-decline-plus plan.

The chancellor went further and essentially described cuts as good in themselves. A small state – which will be back to 1948 levels by 2018 according to the Institute for Fiscal Studies – is not necessary but desirable. The chancellor made it clear that fiscal prudence and austerity (previously immovable bedfellows in the national narrative) are not the same thing. 

So when the chancellor says, “Let’s Finish the Job”, we need to make sure we understand what job he means. It’s worth noting that this has even unnerved Iain Duncan-Smith, who today described the plans as “unbalanced”, and a source close to the DWP Secretary of State described the focus on benefit recipients as “hacking at the same people”.

Let’s be clear. We are being asked to commit to a plan that gives up on those that dip below an ever-rising level of poverty. No safety net, no ladders, no ropes, sink or swim – neatly summarised by the news that the last vestiges of the social crisis fund (local authority’s hardship fund for families facing emergencies) is to be abolished. This welfare state lacks the vision of 1948 and is deeply at odds with the British notion of commonwealth that has stood at the heart of our state and national culture for centuries.  This does not reflect my understanding of social responsibility.

In my view, the chancellor’s plan is bad news for struggling families and communities that, despite green shoots elsewhere, may now never recover from the recession should this current economic strategy continue. Now that austerity does not mean fiscal prudence, the debate about the future role of the state in building good economies, intervening in market failure and tackling poverty needs to be challenged and seized. Obviously, this needs to be done in new ways. 

For a calmer summary of the implications of the Autumn Statement 2013 for the welfare state and for economic strategy, please see VSNW’s Briefing #87.  For a less calm vision of how fiscal prudence and austerity are not necessarily the same thing, you can see the economist Dr. Richard D. Wolff talking about the cynical use of “austerity” – it’s conspiratorial and simplistic, but a striking analysis of austerity.

For me, this is now the moment when values about the future, about growth, can once again be discussed as part of the mainstream political debate.  And, I think, a renewed conversation about the role of the voluntary and community sector in relation to the welfare state and economic strategy.