Opportunity Now: In Work Poverty Still a Concern

The ONS has released its latest Labour Market Stats. Overall, employment is looking up; despite a few ups and downs over the past year on the whole it is on the rise:

• There were 30.61 million people in work. This was 74,000 more than for February to April 2014, the smallest quarterly increase since April to June 2013. Comparing May to July 2014 with a year earlier, there were 774,000 more people in work.
• There were 2.02 million unemployed people, 146,000 fewer than for February to April 2014 and 468,000 fewer than a year earlier. This is the largest annual fall in unemployment since 1988

The most frustrating thing about the ONS stats is that they don’t automatically segregate data by gender and ethnicity. Regarding the workforce as one homogenous group doesn’t help to identify the reality of employment inequality which continues to affect women and ethnic minorities today.

If this inequality wasn’t the case then we wouldn’t have a gender pay gap and the Financial Reporting Council wouldn’t have announced (today) that ‘and race’ will be added to how organisations report on diversity.

So, we need to dig behind the data a little bit to try and spot the trends. What immediately springs out is that the number of people with second jobs, in self-employed part-time work or in unpaid family work has increased significantly year on year from May-July 2013 to May-July 2014:

• Self-employed people working part-time– increased by 12.3%
• Unpaid family workers – increased by 12.3%
• Total workers with second jobs – increased by 6.7%

The rise of unpaid family workers and workers with second jobs are two of the clearest indicators that ‘work that pays’ is not equally available to all.

Is the rise in self-employed people working part-time an indicator that these people are cut out of ‘traditional’ employment and turning to self-employment to make ends meet? It would be interesting to know the gender and ethnicity breakdown of these percentage increases; we already know from our Race at the Top report that between many 2008 and 2012 black, Asian and minority ethnic (BAME) groups have found it preferable to start a new business than to find employment in the more traditional industries.

Whilst we fully support entrepreneurship and part-time working (the latter is a core part of agile working that is critical to today’s workforce) but it is foolhardy to assume that take-up is born out of choice over necessity, and that it is paying off.

The data also shows that pay growth isn’t rising as fast as hoped. The CIPD’s commentary highlights that the pay growth remains “well below all measures of price inflation”.

In fact, these factors all point towards the relentless trend of in-work poverty.

The rise of in-work poverty has been crucially highlighted by the JRF. (Add to this, the emergence of a squeezed middle-earning individuals who are struggling to make ends meet and unable to finance for their futures - see the Centre for London’s Hollow Promise report).

In-work poverty predominately affects those earning under the Living Wage, and we know from the Fawcett Society’s fantastic research that 62% of workers earning below Living Wage are women, and that 25% of all working women are on less than Living Wage*. Sadly, we don’t know the percentage of BAME people earning under the Living Wage. 

Employment may be on the rise overall, but just how rosy is the picture for those groups that aren’t able to access work that actually pays?

*The changing labour market: delivering for women, delivering for growth (April 2013)