We need laser-like focus on better jobs in our cities

As signs of economic growth gather, the question of what sort of recovery we will see is increasingly important. It is often assumed that a rising tide will lift all boats, and as the economy grows the benefits will trickle down, reducing poverty as they go.  However, we should know from the period prior to the recession that this is not automatically the case.

New research by the Work Foundation published today finds many economically successful cities – in terms of economic output and productivity levels – had static or even growing rates of poverty, even during periods of growth.

The same research also finds job creation has a more significant and immediate impact on poverty than output and productivity growth. But another report, also published today, underscores the point that alongside thinking about the quantity of jobs, we need a laser-like focus on the quality of jobs. The fact that more people are currently experiencing in-work poverty than out-of-work poverty should drive us to prioritise not just more but better jobs.

While the relationship between low pay and in-work poverty is not straightforward, industries with large numbers of low paid jobs such as retail, hospitality, personal services and residential care have higher rates of poverty among their workforce – 17% after housing costs – compared to 8% for all other employees. But better jobs does not simply mean employers paying the living wage (important as that is).  It means jobs that offer security, sufficient hours and opportunities for training and development so workers can do their jobs more effectively and progress to other jobs in the future.

Recent governments have looked to devolve more powers and responsibilities to large cities and their surrounding city regions. Another paper by the Work Foundation, finds this direction of travel offers opportunities for delivering more and better jobs. By linking strategies for skills development with economic development, innovation and business support poverty reduction a can become a more integral part of local growth strategies. This means being able to diagnose the nature of the labour market challenge in different areas and respond to it.

However, the report highlights the need to build capacity within city regions so they can rise to this challenge. That’s why Leeds City Council, Leeds City Region and JRF are today launching a partnership to better understand the relationship between poverty and the economy at the city regional level. It aims to identity what can be done – and by whom – to create more and better jobs to lift people and places out of poverty. This innovative partnership will produce practical research to shape policy and services in the Leeds area, but the results and learning will be relevant to and shared with other cities.