THE BLOG

More Jobs Is Not Enough

05/09/2014 11:58 BST | Updated 04/11/2014 10:59 GMT

For decades, through boom and bust, creating more jobs has become the yardstick by which successive UK governments have measured the health of the economy and the success of their policies. But, as a new Centre for Cities report out today clearly shows, focusing solely on the number of jobs being created is simply not enough. Unless all political parties start to think about the quality as well as quantity of jobs, more and more people will become stuck in low-paid jobs in cities around the country - with implications for both local and national economies.

Of course, employment growth has to be one of the measures of a successful economy. But if the focus is just on numbers of jobs, it ignores the reality for many people around the country, struggling to make ends meet despite being in work. If you don't have a degree or can't access the growing numbers of high-paid jobs, it's increasingly likely you'll get stuck in poor quality work, with fewer 'mid-level' jobs acting as a bridge to better pay. This has damaging implications for the UK's productivity too, with people's skills under-utilised and businesses potentially under-performing as a result.

These changes in the labour market are not new. They're the result of local, national and global shifts in how businesses operate. The increasing integration of technologies into industries and the rise of manufacturing in developing nations have transformed the way in which many sectors operate, often changing or reducing the number and types of jobs they need - with big implications for cities up and down the country.

Over the past 15 years alone, we've seen one million more high-paid jobs created, and 750,000 more low-paid jobs. And we've also seen the gradual decline of 'middle-ranking' jobs - those that paid better, while potentially offering opportunities for progression for those with fewer qualifications or currently in low-paid jobs.

The result? Over one-fifth of Britons are now working for low-pay, and, for the first time, the number of 'working poor' has eclipsed the number of poor people without jobs. And this trend, which is set to continue, is one that is far stronger in some cities than others. For example, over a third of all jobs in cities such as Sunderland and Hull are low paid, while in Grimsby and Blackpool, one in three workers earn less than two-thirds of the median national wage.

In some of the most economically successful cities, the best and worst-paid work alongside each other. But if you're one of the low-paid in these cities, for example in London or Oxford, you're also slammed with the massive expense of living in such high demand cities. Affording a roof over your head and food on the table is not easy on the national minimum wage in less expensive places such as the North East; in London it's even tougher because of the relatively high costs of housing in particular.

Faced with these challenges, how can the next Government build a more balanced and resilient UK economy in the years ahead? The answer is that there's a need to focus not only on numbers of jobs but also types of jobs, ensuring not only that people are equipped with new skills but also that businesses are supported to create more and better jobs, which will help them become more productive and make the most of the people who work for them.

Some of the measures that will help business relate to improving skills, transport, housing and broadband. Making this happen requires the next Government to give cities and surrounding areas more control over their money, so they can make investments to help support both new and existing businesses, including those operating in low-pay sectors, to thrive, create jobs and pay higher wages. Encouraging employment support organisations to work with local businesses, training providers and public sector organisations to match training and employment services with local business demand will also be crucial.

In cities with high costs of living, both national and local governments must work together to find ways to reduce housing, transport and childcare costs. Westminster allowing cities to keep more locally raised revenue to re-invest in local infrastructure would help, while in some cities, the Low Pay Commission may have a role to play in examining the potential impacts for both employment and local businesses of introducing a city-region-wide minimum wage.

Britain is rightly proud of its track record of job creation, but a successful 21st Century economy requires more. Ahead of the 2015 Election, it is time for all parties to face up to the changing face of the labour market, and set out their commitments to building a more sustainable, productive and robust economy that offers opportunities for all workers, and cities, throughout the UK.