Work is failing to provide a guarantee against poverty. 60% of people of all ages living in poverty are in working households, the highest figure ever recorded. Increasing numbers of people are using food banks because their regular income from low wages is simply not enough to live on.
Despite falling out of the post-financial crash news cycle, demand for food banks is rising in the UK. Speaking at our Inclusive Growth conference on 30th October, Emma Revie, Chief Executive of the Trussell Trust showed data of rising numbers of three-day emergency food packages dished out each year, up to 1,332,952 in 2017/18 (from 913,138 in 2013/14). She reiterated how 'the statutory safety net has too many holes in it' and that food banks cannot become ‘a pseudo-safety net that lets the state off the hook’.
Work should be something people can thrive in, not just survive in. Yet with the number of people on zero-hours contracts stubbornly high and more than a fifth of workers earning less than the living wage, we have an economy where people are still struggling to earn enough to eat. Food banks are papering over the cracks, not only in our retreating welfare state, but in our society. The Public Accounts Committee recently accused the DWP of a ‘systemic culture of denial and defensiveness in the face of any adverse evidence’ against Universal Credit causing ‘financial hardship for claimants’, pushing the view that people should manage better and manage on less.
Managing on less only deepens the wider, seemingly permanent, problematic state of affairs, from obesity to mental health issues. The Food Foundation found that 52% of households with children are unable to afford a ‘socially acceptable diet’, such as fruit, vegetables, and healthy choices. People who are severely food insecure had annual health costs 121% higher than those who were food secure; this is problematic when our NHS already faces a funding crisis. But while food prices rose by 7.7% between 2002 and 2016, incomes for the poorest families fell by 7.1%.
Research by Citizens UK in 2015 found that Tesco, Asda, Sainsbury’s and Morrisons cost the taxpayer just under £1bn a year in tax credits and extra benefits payments because of their low-pay to employees. Yet all four are partners to schemes with foodbanks or food donation networks. As the rollout of Universal Credit debacle has showed, the benefits system is no guarantee against poverty either. ‘Low income benefits, not earning,’ is the biggest single and fastest growing reason for food bank use in the UK, accounting for 28% of referrals, up from 26% in 2016/17.
Amazon recently announced that it is raising US and UK wages to warehouse workers, a welcome announcement that will benefits thousands. Critics, however, including Frances O’Grady (TUC) and Benedict Dellot (RSA) have pointed out that it isn’t just that Jeff Bezos is experiencing a sudden moment of altruism. The tightening labour market – unemployment is around 4%, a record low - suggests that workers have more bargaining power, especially to help drive up demand for better pay and working conditions. Meanwhile, UK Amazon employees have had their share and incentive schemes removed, something GMB General Secretary, Tim Roache, has called a ‘stealth tax’.
The national living wage has gone some way to address the issue of low-pay, though Living Wage Foundation director, Tess Lanning, said only this year that many of those who are going hungry are also working. But it’s not just about pay and benefits; the ‘insidious monitoring’ of Amazon workers remains, documented by James Bloodworth, and the culture of ‘any work’ continues. 549 businesses have committed to the Scottish Business Pledge so far, which includes elements such as no exploitative zero-hours contracts and committing to prompt payment. Initiatives such as this raise awareness of the need for ‘good work’ but as long as the pledges remain voluntary the impetus for lasting change in work culture will lack staying power and real meaning. The public outcry at Google and Starbucks avoiding paying tax in the UK illustrates that there is not just an economic argument for good work, but a moral one too. Prosperity can only trickle down if businesses pay their taxes to the society whose labour their success is built on. The idea of ‘good work’ – work that provides an adequate wage, secure employment, and progression, and which isn’t just focused on work intensity – has the potential to address not only the problem of those living in poverty but the public funding challenges our whole society faces. We must not be afraid of an approach that takes morality into account as much as it does money.
As CPP argues, inclusive growth offers a model that expands the notion of economic policy to incorporate investment in social infrastructure – from skills to affordable childcare – just as ‘good work’ addresses more than someone’s daily job. Inclusive growth provides the impetus to shift away from the economic practices that stress quantity but neglect quality.
The solution needs to offer sustainable security – one where people can meet their needs in the immediate and longer-term future – and one where they can thrive and progress in work. It’s not just about raising wages. Or asking for ideas on philanthropy. Our latest report, Skills for Inclusive Growth, makes the case that we must focus on fair pay, retraining and equipping people with skills they can use to progress into higher paid work. Then people will feel valued, add value, and we’ll have the inclusive economy with nowhere, and no one, left behind.