Work & Wages

GM Good Employment Charter

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Making employment work for everyone
by Ian McArthur, Business Growth Hub

For many people, modern work isn’t working. Record high employment figures conceal major deficiencies in the quality of work people are doing.

In an increasingly insecure UK labour market, poverty rates have risen for every type of working family and one in eight workers nationally is now in poverty.

The Greater Manchester Independent Prosperity Review, launched earlier this year, found that wages have fallen by 6.6% in real terms between 2006 and 2016 for the average worker in the city-region, in a labour market which has seen a rise in unstable and low paid work.

This can’t be right. We need to be offering employees secure, fulfilling and well-paid work that prevents them from falling into poverty in the first place, and that means that our businesses and third sector organisations can grow and succeed based on the skills and engagement of their staff.

That’s why in Greater Manchester we’re doing things differently, working with employers and employees in all sectors, trade unions, representative organisations and other key stakeholders to develop a Good Employment Charter.

Through two consultations and a broader co-design process involving GMCVO and others, including GMPA, we’ve developed a list of seven employment characteristics which define good employment:

Security of work
Flexible work
Payment of a real living wage
A productive and healthy workplace
Excellent people management
Excellent recruitment practices and progression
Workplace engagement and voice

Taking the Charter forward into implementation we want to support employers on a journey towards best practice in each of these fields, demonstrating the positive impact that better employment standards can have on employee welfare and organisational performance alike. The Charter has been developed with a tiered approach to help support and encourage employers to share excellent practice, access support to progress to higher standards, and help them become more successful as a result.

The Charter model has now been agreed by the Combined Authority and, working with partners, we are beginning the process of putting the Charter into action. Already, it has been highlighted by the recent Greater Manchester Independent Prosperity Review as an important element in increasing economic growth and pay in the city-region.

The Charter Supporters’ Network will be launched in July and employers from across the private, public and community and voluntary sectors will be able to sign up then and access a number of resources and networks to help drive up employment standards. Also in July, a representative pilot group of employers from across Greater Manchester will work with the Charter Implementation Unit (hosted by the Growth Company), on developing membership standards appropriate for employers of various sizes across all sectors. Third sector employers who would like more information on the Charter or would like to take part in the pilot process should contact Ian MacArthur

 

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Councils must tackle in-work poverty

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By Marcus Johns, IPPR

One in every three children in Greater Manchester lives below the poverty line, after housing costs, and this continues to rise. These new figures from End Child Poverty are shocking.

While cuts and reforms to benefits are largely to blame, low wages, insecure work, and poor-quality jobs have also had a significant impact. In 2018, the TUC found the number of children nationally growing up in poverty who live in working households is growing – it’s currently around 3.1 million.

The relationship between high levels of employment and lower poverty has been widely assumed. But, in the era of record high employment rates – currently 74% in Greater Manchester – alongside increasing levels of poverty, this view appears defunct.

At IPPR North, we recently published ‘Decent Work: Harnessing the power of local government’, a report highlighting the North’s job quality crisis and some of the things northern local authorities are doing to mitigate it.

This crisis sees 1 in 4 northern workers paid less than the Real Living Wage of £9 per hour, the amount needed to just get by. In Greater Manchester, that equates to 270,000 people. The picture is even worse for women: 1 in 3 are paid below the living wage in the North. This crisis is heightening: average weekly pay has fallen £21 per week in real terms since the financial crisis. This puts pressure on household budgets, leading to parents skipping meals to provide food for their children and harming wellbeing with the constant threat of slipping into uncontrollable debt or being unable to pay rent.

To tackle this crisis, we need to focus on decent work. Decent work means secure and reliable hours, training and progression opportunities, a voice at work and fair and decent pay. So, we are calling for the North to become a ‘Living Wage Region’ by 2025 – where everyone is paid at least the living wage – and for the creation of a Northern Employment Charter, that brings together the region’s local employment charters to a shared minimum standard of work. Our report outlines a roadmap to get there, calling on local government to use all levers at their disposal.

Many authorities are already combating low pay and poor-quality work. Despite the headwinds of a decade of austerity, councils are overcoming financial and legal barriers—both real and perceived—to improve pay and conditions for staff, workers in their supply chain, and in their local economies. Councils like Manchester and Salford are leading the way in these efforts.

But what more can be done in Greater Manchester?

All boroughs in Greater Manchester need to work together to embed decent work – our report outlines 27 practical recommendations for councils to start implementing both internally and in their suppliers’ workforces. This is accompanied by our 10-point guide for Councillors on decent work in commissioning and procurement.

We know Greater Manchester’s employment charter has excellent potential – it needs to be implemented at pace and used by employers across the city region. It can send a clear message: Greater Manchester won’t accept less than decent work for all citizens.

We also know Greater Manchester has many anchor institutions, universities, colleges, hospitals whose geography is “sticky”: they can’t or are very unlikely to ever leave Greater Manchester. They can be supported to adopt decent work and pay living wages. They are also big customers, who can throw their institutional weight behind decent work by demanding it of their suppliers.

Marcus Johns article for GM Poverty Action

Marcus Johns, IPPR North

But crucially, central government must step up. The minimum wage should be raised to at least the real living wage, employment rights should be strengthened and enforcement improved. Local government needs fair and proper funding to deliver decent work indefinitely.

We have a job quality crisis largely because of political choices central government has made: the choice to allow the number on zero hours contracts to rise and real pay to fall. But local government has a choice to do what it can do locally, right now.

Without decent work, working people – and their children – across Greater Manchester, and across the North, will continue to be affected. Local government here in Greater Manchester and across the North must act now.

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National Living Wage

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National Minimum Wage and National Living Wage

HMRC wishes to raise awareness of the new rates of pay that will come into force when the National Minimum Wage and National Living Wage increase on 1 April 2019 to ensure that all employers are at least paying their staff the legal minimum.

A website to assist employers is available and employers and employees can contact Acas for advice and support on a wide range of employment rights and responsibilities (or call 0300 123 1100 from Monday to Friday, 8am to 6pm but check your call costs first as they vary from 3p to 40p per minute).

HMRC also want to encourage low-paid workers to come forward to make sure they are getting the wages they are legally entitled to. They are looking to raise worker’s awareness of their entitlement and asking them to report any under-payments for HMRC to investigate if necessary.

HMRC believe that many people who are paid the National Minimum Wage or National Living Wage still lose out on their full entitlement because of a series of common errors made by their employers. Workers often don’t realise that they are being short-changed and that it’s possible for them to get back the money they are owed.

The new rates of pay per hour after 1 April 2019 will be:

For Apprentices in their first year or under 19:      £3.90
For employees under 18:                                           £4.35
For employees aged 18 – 20:                                    £6.15
For employees aged 21 – 24:                                    £7.70
For employees 25 and over:                                      £8.21

Comment from GMPA, “Under-payment of the minimum wage is a major issue of in-work poverty, particularly exploiting workers from marginalised groups. We fully support HMRC in encouraging low-paid workers to come forward to make sure they are not being underpaid. However we take issue with the description of the minimum wage as a “National Living Wage”, which is misleading and confusing for employers and the wider public and does not reflect what is needed to achieve a decent standard of living. 

The real Living Wage is an hourly rate independently calculated to be enough for a decent minimum standard of living. That rate is £9/hr outside London, a new rate is calculated and announced every November in Living Wage Week, and we encourage employers to voluntarily commit to paying all of their staff that rate, and to become accredited as Living Wage Employers. Almost 150 employers across Greater Manchester have been accredited as Living Wage Employers, including Salford City Council, the GM Chamber of Commerce, and many businesses and charities. 

The so-called National Living Wage is a re-brand of the minimum wage, but it is not a living wage as it is not based on the cost of living. It could also be argued that it is not truly national as it does not apply to people under the age of 25. This distinction is important because both the minimum wage and the real Living Wage are valuable tools in the bid to end in-work poverty, and should not be allowed to confuse or to distract from each other. Please see the Living Wage Foundation’s explanation for further information.

 

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Making employment work for everyone

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By Andy Burnham , Mayor of Greater Manchester

For many people, modern work isn’t working.

In an increasingly insecure UK labour market, poverty rates have risen for every type of working family and one in eight workers nationally is now in poverty.

Our Greater Manchester Independent Prosperity Review, launched earlier this year, found that wages have fallen by 6.6% in real terms between 2006 and 2016 for the average worker in the city-region, in a labour market which has seen a rise in unstable and low paid work.

This can’t be right. We need to be offering employees secure, fulfilling and well-paid work that prevents them from falling into poverty in the first place, and that means that our businesses can grow and succeed based on the skills and engagement of their staff.

That’s why in Greater Manchester we’re doing things differently, working with employers and employees in all sectors, trade unions, business representative organisations and other key stakeholders to develop a Good Employment Charter.

Through two consultations and a broader co-design process involving GM Poverty Action and others we’ve developed a list of seven employment characteristics which define good employment:

  • Security of work
  • Flexible work
  • Payment of a real living wage
  • Excellent people management
  • A productive & healthy workplace
  • Excellent recruitment practices and progression
  • Workplace engagement and voice

We want to bring employers with us on a journey towards best practice in each of these fields, demonstrating the positive impact that better employment standards can have on employee welfare and business performance alike. The Charter will therefore have a tiered approach to help support and encourage employers to share excellent practice, access support to progress to higher standards, and help them become more successful as a result.

Through our co-design process and as we move into the implementation of the Charter, we’re building a coalition of organisations committed to improving employment practice and offering fair conditions for their workers.

In this way, Charter members will be at the heart of the movement, demonstrating its values and spreading its influence and positive impacts to other employers in Greater Manchester – advocating membership amongst their networks and supply chains.

Our Charter model has now been agreed by the Combined Authority and, working with partners, we are beginning the process of putting the Charter into action. Already, it has been highlighted by the recent Greater Manchester Independent Prosperity Review as an important element in increasing economic growth and pay in the city-region.

I’d like to thank GM Poverty Action for the help and advice they have provided throughout the Charter’s design. I believe the model we have created together can and will make a real difference for people in Greater Manchester.

More information is available on the GMCA website

You can read GMPA’s responses to the Good Employment Carter consultation here

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IKEA – Introducing the Living Wage

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IKEA – Introducing the Living Wage is an investment we are incredibly proud of
By Katarina Verdon Olsson, Store Manager at IKEA Manchester (Ashton-Under-Lyne)

Since IKEA became the largest accredited Real Living Wage employer in retail  in 2016, the Greater Manchester Living Wage Campaign has worked with the local store in Ashton-Under-Lyne to promote their good work, and to encourage other employers to follow in their footsteps. Here the local store manager Katarina Verdon Olsson writes about the benefits to co-workers and the business as a whole.

As a values-driven organisation, we believe in providing a meaningful wage to our co-workers that supports the cost of living and this is why we were the first large retail employer to commit to paying the Living Wage and becoming an accredited member of the Living Wage Foundation.

On 1 April 2016, IKEA UK introduced the Living Wage – as defined by the Living Wage Foundation – for all of our co-workers. Today 9,000+ co-workers of all ages across the UK benefit from earning above the statutory National Living Wage. On a local level this has impacted the lives of 300+ co-workers living and working in the Greater Manchester area at the IKEA Manchester store in Ashton-Under-Lyne.

This move was part of a wider transformation of basic co-worker conditions introduced globally by IKEA to ensure that co-workers have the right level of pay, the right contract and an appropriate schedule.

Introducing the Living Wage is an investment we are incredibly proud of, particularly as our co-workers have told us about the positive benefits this has had on their lives. Below are some stories from our co-workers working at the IKEA Manchester store who have shared how the Living Wage increase has impacted them:

“My daughter loves to dance and is passionate about many different types of dance such as ballet, tap and modern. The increase in the living wage meant that we could afford more lessons and the cost involved with performances. The extra money also meant that I could take my family on weekends away more often within the UK.”
Tim (Recovery Co-worker)

“The increase in the living wage meant I could save more money for my dream wedding in Disneyland in Florida. I had also been secretly saving for a honeymoon in the Caribbean which I surprised my girlfriend with the news before we jetted off to the US for our wedding in November last year.”
Danielle (Kitchens co-worker)

Living Wage week photo for GM Poverty Action

IKEA workers front and centre at our 2016 Living Wage Week event

Implementing the Living Wage Foundation’s recommended rates of pay is not only the right thing to do by our co-workers and our values but it also makes good business sense. As we continue to grow in the UK, motivating and retaining our co-workers, as well as attracting new co-workers, becomes increasingly important. We also believe that a team with good compensation and working conditions is in a better position to provide a great experience to our customers.

Katarina Verdon Olsson IKEA article for GM Poverty Action

Katarina Verdon Olsson

As well as being good for society, we have also seen business benefits to paying the real Living Wage. At IKEA Manchester, since adopting the Living Wage in 2016 we have not only seen a decrease in staff turnover by -12%, we have also seen the improvement in the co-worker engagement survey (+3.7%) and customer experience key performance indicators.

We encourage other businesses to explore what the benefits of paying the real Living Wage would mean for their staff, business and the Greater Manchester area.

 

 


Can you become an accredited Real Living Wage Employer? It’s easier than you may think –
please fill out this form to start the process and join over 150 Greater Manchester-based employers in committing to paying your workers enough to live on.

 

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What difference does my vote make?

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Making the difference!

By Chris Smallwood, Director, Anchor RemovalsAnchor Removals - Chris Smallwood for GM Poverty Action

It is one of the most frustrating statements politicians hear from their electorate – “What difference does my vote make?”

I don’t agree with the sentiment or the statement, but I do share the sense of disenfranchisement. Let’s face it, when you have a family – mum, dad and two little infants running around, you are struggling to pay a bill or don’t know where your next earnings are coming from – why would you feel politics has any value to you?

Poverty isn’t new but according to Joseph Rowntree Foundation, after 20 years of falling poverty rates we are now seeing a trend upwards. Whilst I am no statistician and I am certainly not an academic, I am an employer and I can see around me in Salford more people on the streets living rough and more families struggling to survive. I wasn’t happy just dropping the odd tin of beans in for the foodbank at my local supermarket. As an employer I knew I had the power to change things even in my business of just 10 employees.

So, what can a small business like mine do to make a difference? Since 2016 we have paid the real living wage as a minimum and we don’t operate zero hours contracts. In effect all our team are salaried with the minimum 40-hour week currently earning £18,200 per year. It’s not a lot but when you compare it with the widely feted “gig” economy – it is a game changer!

So, what is the “gig” economic model? It is companies employing people as sub-contractors, so they are not directly employed by the company, therefore any equipment, resources, holidays, National Insurance contributions and taxes are managed by the employee not the employer. The terms of any Service Level Agreement (SLA) will often have punitive measures for the employee in the event of a failure to deliver the SLA, this can be as basic as a day off sick. It is also fair to say that many of these sub-contractors (whilst bright and effective operators in their specialist trade) are not trained or equipped as business owners and very often fail to understand the hidden costs of keeping account of the business expenses, tax and other requirements. This often drives people into poor health and welfare (long hours, no holidays and barely seeing the family) or debt and the employee must wait for work to come in, which can mean no income at all. You can’t claim benefits if you are classed as working or self-employed and this is getting much worse thanks to the welfare and reform work act 2016 where the benefits cap has been substantially reduced (but it is a commonly held belief that there are a large number of “gig” workers on less than the minimum wage).

The current government see the new ways of employing as “entrepreneurial” but as an entrepreneur myself, I object to the comparison. It is a dereliction of duty for employers when they know they can employ on a full-time basis but choose not to. The government instead of encouraging better wages and a more stable working environment for employees, chooses to use the stick of reduced benefits, forcing people into impossible life choices.

Don’t get me wrong, it isn’t easy being a good employer and it doesn’t guarantee you good employees. But it is no coincidence that in a small business like ours, staff turnover is very low.  They love the company and they are proud of what we do!

The public and our customers want to see good practices like “fair trade”, and in our case fair employment terms. Overall, it produces happier staff and better customer service, society benefits with more people in the community employed, the government benefits from more taxes and the families of our employees benefit from less financial stress and regular working hours.  The idea that you can’t make money is refuted by the fact that we have been a socially responsible, profit making business for 3 years now! Having spoken to many employers, they do see the benefits of what we are achieving but they look at what the bigger organisations in our industry are doing and they want to be competitive.  However, it is worth noting that in 2017 small to medium sized enterprises (SMEs) employed 16.1 million people; that is 60% of all private sector employment in the UK* and they constitute over half of all accredited Living Wage employers**

*https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/663235/bpe_2017_statistical_release.pdf

** https://www.livingwage.org.uk/sites/default/files/University-of-Middlesex-Putting-the-Living-Wage-to-Work-October-2016.pdf

 

 

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Working Wardrobe

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Working Wardrobe, funded by Bolton at Home, is being set up to tackle another barrier into employment that so many men and women face today. That barrier is the lack of suitable clothing to wear in order to make a good first impression at an interview.

Working Wardrobe want to give those people the best possible chance of making the right first impression and of being successful in getting that job.

Working Wardrobe for GM POverty Action

Members of the Working Wardrobe team: Tony Cottam, Carrie Riley, Dawn Juson, Linda Jones

Their offer is a one to one appointment in Bolton town centre, choosing an outfit and accessories.  The customer will be given this outfit to keep at no cost to them and they will also get final interview preparation advice. If they are successful at the interview then they can return to the store for additional clothing and critically in-work support for as long as they need it. This is so important as making the transition from benefits to work is often a difficult and troublesome period. They will be assigned their own officer who will help with any issues that may prevent the client sustaining that employment – this support will be tailored to their needs.

 

Working Wardrobe for GM Poverty ActionWorking Wardrobe believe this to be a unique selling point for this project. They will have already built up a good relationship with the customer through the first dressing visit. Trust and engagement will have already been established therefore making it more likely that this support will be well received and successful.

Working Wardrobe will be available to all of working age across Greater Manchester.  They now have to complete furnishing and stocking the store with interview type clothing and accessories and they will be looking to the community and local businesses to support this project.

It is a life changing concept. It’s more than providing an outfit. It’s about changing the mind set and empowering every individual who walks through the door. Working on their strengths and motivating each customer to be the best that they can be.

Working Wardrobe have recently launched a crowd fund appeal. Please do take a look and support them where you can.

They will be open for business on Monday June 18th, 2018. For more information please visit their website

 

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Minimum Wages

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National Minimum Wage and National Living Wage

HMRC wishes to raise awareness of the new rates of pay that will come into force when the National Minimum Wage and National Living Wage increase on 1 April 2018 to ensure that all employers are at least paying their staff the legal minimum.

A website to assist employers is available and employers and employees can contact Acas for advice and support on a wide range of employment rights and responsibilities (or call 0300 123 1100 from Monday to Friday, 8am to 6pm but check your call costs first as they vary from 3p to 40p per minute).

HMRC also want to encourage low-paid workers to come forward to make sure they are getting the wages they are legally entitled to. They are looking to raise worker’s awareness of their entitlement and asking them to report any under-payments for HMRC to investigate if necessary.

HMRC believe that many people who are paid the National Minimum Wage or National Living Wage still lose out on their full entitlement because of a series of common errors made by their employers. Workers often don’t realise that they are being short-changed and that it’s possible for them to get back the money they are owed.

The new rates of pay per hour after 1 April 2018 will be:

For Apprentices in their first year or under 19:         £3.70
For employees under 18:                                            £4.20
For employees aged 18 – 20:                                     £5.90
For employees aged 21 – 24:                                     £7.38
For employees 25 and over:                                       £7.83

Comment from GMPA, “Under-payment of the minimum wage is a major issue of in-work poverty, particularly exploiting workers from marginalised groups. We fully support HMRC in encouraging low-paid workers to come forward to make sure they are not being underpaid. However we take issue with the description of the minimum wage as a “National Living Wage”, which is misleading and confusing for employers and the wider public and does not reflect what is needed to achieve a decent standard of living. 

The real Living Wage is an hourly rate independently calculated to be enough for a decent minimum standard of living. That rate is £8.75/hr outside London, a new rate is calculated and announced every November in Living Wage Week, and we encourage  employers to voluntarily commit to paying all of their staff that rate, and to become accredited as Living Wage Employers. Almost 150 employers across Greater Manchester have been accredited as Living Wage Employers, including Salford City Council, the GM Chamber of Commerce, and many businesses and charities. 

The so-called National Living Wage is a rebrand of the minimum wage, but it is not a living wage as it is not based on the cost of living. It could also be argued that it is not truly national as it does not apply to people under the age of 25. This distinction is important because both the minimum wage and the real Living Wage are valuable tools in the bid to end in-work poverty, and should not be allowed to confuse or to distract from each other. Please see the Living Wage Foundation’s explanation for further information.

 

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GM Good Employment Charter – Have your say

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Article by Graham Whitham

GMPA is delighted to see Andy Burnham taking forward the idea of an employment charter for Greater Manchester. This is something we’ve been working on for some time through our joint paper with the Inclusive Growth Unit, our Work and Wages Special Interest Group (SIG) and through the GMPA hosted Greater Manchester Living Wage Campaign.

An employment charter can both celebrate and promote existing good employers and encourage the adoption of positive employment practices by other employers. As a tool it has a role to play in helping to create a more inclusive economy where people are valued and secure in the job that they do.

Getting the charter right from the outset will be crucial in determining the impact it has. The scope and operation of the charter is something Andy Burnham’s team have been exploring and the Mayor has opened a consultation on what the proposed charter should look like. GMPA and the Greater Manchester Living Wage Campaign will be submitting a response (the deadline for responses is April 13th) and we’re encouraging members of our network to do the same, both from the perspective of being employers and as advocates for a more inclusive economy.

An evidence paper published to support the consultation recognises some of the challenges we face in Greater Manchester, around things like low pay and productivity. (The evidence paper can be downloaded from the Greater Manchester Combined Authority website here).  There are other areas where we fare worse than the national average, including employment rates for people aged 50 to 64 and people with learning disabilities. It also recognises some of the city region’s strengths and the potential for economic growth to be more closely linked to positive outcomes for individuals and communities.

The Charter will aim to complement existing initiatives at a local authority level, such as employer pledges and charters in Bolton, Oldham and Salford, and will be co-designed by local employers, employees and residents. It will also sit among a series of other policies that are focussed on creating a more inclusive economy.

Graham Whitham, Director of GMPA and author of report on economy for GM Poverty Action

Graham Whitham

During Living Wage Week in November, the Greater Manchester Living Wage Campaign hosted a series of workshops across GM looking at how an employment charter could work and what it might include. A number of key themes emerged from those workshops, including the need for clear standards for what ‘good employment’ means in Greater Manchester, a ‘good employment toolkit’ to support employers to amend and improve working practices and the active involvement of trade unions in workplaces. These themes will help inform our response.

Please make sure you take the opportunity to feed into this process.

 

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Is having a job the way out of poverty?

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Is having a job the single most important way out of poverty?

Last year GMPA Director Tom Skinner launched a series of articles on in-work poverty, asking “Is work the best route out of poverty?” Here Bolton Councillor Sue Haworth unpicks that question by exploring the changes in evidence over the last ten years.

The Prime Minister often declares at the despatch box that the best solution to poverty is for people to have jobs. But there are two stand out issues pertaining to this that we must address in Greater Manchester. The first is the fact that not all our citizens here in GM are able to take up paid employment. Mostly these are people with long term ill health problems and / or disability. Under devolution we have a responsibility to prevent worsening poverty in these people’s lives and to encourage them to volunteer and to stay included in communities in GM. The new Work and Health programme in GM can act to prevent all the dimensions of poverty in non-working people’s lives and seek tangible benefits for people and their families.

Secondly, we must unpick what the Prime Minister means by her statement. Work is a source of income and it is also a source of all round economic wellbeing, while poverty has many facets, for example relative and absolute poverty, and poverty of self determination and equality.

There is growing evidence in GM of a tipping point regarding these effects; make work too insecure, make the income stream from the work too variable or too low, and the benefit rapidly starts to wane. If the experience of work is low pay, persistent stress and poor working conditions, again a tipping point is exceeded, where the benefit of work becomes overshadowed by the daily negative experience of poor quality work.

Only five to ten years ago I was persuaded by the public health knowledge base in England that work was likely the number one factor that contributed to a person’s health and wellbeing. But this evidence is now under the microscope by today’s generation of academics, building the knowledge base on inclusive growth, work and poverty here in GM. Reports are already warning us of the tipping point effect that poor quality work is having in people’s lives in GM.

Work is no longer the poverty panacea we were working towards five or ten years ago. Reports from The Inclusive Growth Analysis Unit at The University of Manchester make it clear that we must address the quality of work with as much vigour here as we do tackling unemployment. Pay, terms, working conditions and underemployment are vital components of the work and poverty agenda in GM today.

 

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