The government must make in-work poverty more central to its efforts to tackle child poverty.
This is one of the most striking and important conclusions in the wide ranging report published today by the Government's Social Mobility and Child Poverty (SMCP) Commission. The report assesses government progress on tackling child poverty and social mobility, and identifies areas where activity needs to be stepped up.
Rightly, they highlight in-work poverty as a growing problem, and one where government lacks a clear strategy. Ministers have tended to argue that the solution lies in returning the UK economy to growth. While this will undoubtedly assist, it is not sufficient. Even before the downturn, in-work poverty was a problem on the rise, something that JRF's research on Monitoring Poverty has demonstrated over many years.
This conclusion is also borne out in the figure in the SMCP report: back in 2000/01 a third of children living in poverty were in households where at least one parent was not only in work, but working full time. By 2011/12 that had risen to half. The Commission is right to argue that a strategy to eradicate child poverty that fails to tackle in-work poverty will fail to meet its goals.
So what should a strategy to tackle in work poverty look like? Action is required on a number of fronts, some the responsibility of government, others less so.
Starting with government, a central action as to be ensuring welfare reforms do ensure it always pays to work. While this is a claim often heard about Universal Credit, the government's flagship reform to the welfare system, JRF research shows this will not always be the case. Indeed, some lone parents and second earners will be better off working part time than full time; hardly a recipe helping people to better their position.
Low income families also need help to meet the additional costs that work brings. For parents, chief among these is childcare, which has been rocketing in price. A lack of affordable childcare means too often it is not worth a parent working more hours, as any extra income is simply swallowed by the cost of additional childcare. The government has missed a trick here. It recently consulted on plans to give extra help to parents with childcare costs, but only a fraction of the money on offer will be targeted at low income families. This is where it is most needed and would have the greatest impact on in-work poverty.
But this agenda is not simply about what government can do; employers also have a crucial role to play. One idea that has gained traction in recent years is the need for more employers to pay the Living Wage. This is undoubtedly important, especially for those households where people are already working a lot of hours, yet are still experiencing poverty. But alone, the Living Wage will not solve the problem which is also about the number of hours worked, security of contract and a lack of progression opportunities for those engaged in low paid and low skilled work.
What we need to see is greater employer aspiration and demand for skilled workers, so fewer people are trapped in low paid low skilled work. There is a need to understand the context employers in different sectors are operating within. This has implications for how they choose to compete in markets, which in turn shapes the terms and conditions they offer their staff, and whether clear progression pathways exist for low paid and low skilled workers.
Drivers for 'good jobs' include employer ethos, the commitment of managers to develop staff, and a belief that better employment conditions will result in a more committed and productive workforce, which, in turn, will result in better business performance. In short, a business case for being a better employer needs to be constructed and sold within an organisation, and then transmitted to others through peer to peer learning.
To tackle in-work poverty, government action on issues like welfare reform and childcare policy will only ever be half the challenge. The other half lies in how to tackle the long standing problem of why the UK has so many bad jobs.