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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