Thursday, 13 February 2014

In-work poverty is the greatest moral outrage of our generation - it deserves to be treated like it

Blog from January, originally here.

The moral outrage of in-work poverty

All things considered, I thought some of the reaction on the left recently to George Osborne’s intervention on the minimum wage bordered on the churlish. Even if Osborne’s conversion does owe more to psephology than theology, that a Conservative Chancellor sees Government action on it as a vote winner can only be a positive thing in the long term.
That said, as the Westminster road show has quickly moved on to other matters, the issue of low pay certainly shouldn’t be allowed to be ticked off as covered or consigned to footnotes in next year’s election. Not least for the Conservatives because it will take more than one policy announcement to reach the type of voters that have felt long ignored by them
More importantly, the matter demands far more attention than that – and a great deal more anger among Westminster opinion formers than it’s currently granted.
It’s also not just about economics, but the withering of a basic social contract, and something that goes to the heart of what’s gone wrong with work in this country.
No matter what popular mythology tells us, a great many people don’t actually like work; it’s supposed to perform a function. The bargain used to be that if people looked for work, got themselves out of bed and contributed, they would at least be afforded the dignity and self-sufficiency of being able to pay for a roof over their heads and food for them and their kids. Maybe over time there’d come the chance of a higher wage or home ownership.
It’s an understanding that has sustained support for capitalism, through all its flaws, for generations. Ultimately it survived in Britain because it could – when run in the right way – put food on the table for the vast majority.
Now all of that is unravelling. People are putting more in but getting less out. Growth up and wages flatlining. The jobs market hollowed out, making social mobility even harder. Affordable housing disappearing, rents ballooning. Increasingly, people are subjected to having to rely on help of the state or others to prop them up – not momentarily, but permanently.
A miserable litany of facts bears this out, so numerous they could fill the rest of this page. To spare you and give just a few: over 90% of new claims for housing support are from people in work, while the Trussell Trust say half of people who need to use their food banks have a job. For the first time, more living on the breadline are in work than not. Two out of three children growing up in poverty do so in working households.
This applies to people who come here looking for a better life, too. For some reason, the likes of McDonalds and Costa have started to get their employees to bear a tiny flag of their home nation on their name badge. Visit one and the panoply of nations represented is a reminder if needed that these are the sort of jobs migrants do when they arrive: low paid and insecure. Its useful context for when politicians go headline hunting on ‘benefit tourism’. The number of migrants claiming social security is infinitesimally small, of course. But given most work, it’s likely that the bulk of those who do claim are in employment. Figures are hard to come by, but take the Working Tax Credit – 14.5% of its claimants are non-UK national, compared to 6.4% of out-of-work support (just 2.7% of JSA is claimed by EU migrants).
Contrary, then, to those who look to play people of different nationalities off against each other, their plight is a tiny part of a much broader picture affecting millions of their British neighbours and friends.
The sense of contributing more and getting less is echoed higher up the income scale too – higher tuition fees for the same standard of education; house prices up, quality down – but it is most acutely felt by those on lower incomes. It’s hardly any wonder so much of the electorate are so angry. Nor that many, grimly, take it out on those they (wrongly) deem to be getting an easy ride while they struggle.
Somewhere along the line, something has gone badly wrong. And given that low wage, insecure jobs are about the only jobs we’re creating as a country at the moment, it’s a crisis which will only get worse without action.
Even putting aside issues of GDP and central government spending, restoring that basic social compact of work providing a decent life is fundamental to restoring the spiritual and moral health of a country that calls itself first world. Certainly no one in public life can ever again talk credibly about ‘work being the best route out of poverty’, of opportunity or aspiration, without acknowledging it.
Tackling the cost of living is a vital part of this, of course, but it’s only one half of the challenge. Many uncomfortable with asking more from the powerful push lower tax as the answer, but even abolishing all tax on people on the minimum wage, at great expense, would still leave them with less money than a Living Wage paid by their employer.
Even at £7 an hour, a full time worker in London takes home just over £1,000 a month. The average private rent in the city is £520 a month per person for a flatshare. A Zone 1-3 travelcard: £136. Then there’s council tax, utility bills, and so on.
Far stronger across the board action on the Living Wage (and London Living Wage) is simply non-negotiable, not least as it would have a positive upward pressure on the wages just above it too. Employee representation on company boards also desperately needs to be strengthened if the distribution of rewards are ever to be addressed properly, and sectoral collective bargaining strengthened. These last two are partly what has distinguished the ‘Coordinated Market Economies’ of northern Europe which Labour rightly admires.
Needless to say we have not arrived at this sorry state through the failure of any one individual, government or even party. But that someone in Britain can now work a 37 hour week and still not be able to provide the basics for themselves and their family is a national disgrace, and the starkest symptom of how far we’ve fallen as a country. If our politics can’t fix it, we’ve every right to wonder what it’s there for.