31 January 2011
The government must focus on expanding job prospects for the lowest earners if it is to meet its targets for benefits savings and poverty reduction, according to a study published today.
The report by the Work Foundation says welfare policies should look beyond tackling unemployment and also address in-work poverty, which it claims is a major hindrance to the UK’s economic performance as well as a cause of social injustice.
Some 10 million UK workers are thought to be struggling on wages of under £15,000 a year.
‘The bottom 10 million’ was the group with the greatest falls in employment during the recession and still remains most vulnerable to wage reductions and job insecurity, according to the report Welfare to what? Prospects and challengesfor employment recovery. Public spending cuts are likely to make matters worse, it says.
Senior researcher and report author Naomi Clayton said: ‘Both the geography of the recovery and the public spending cuts are likely to widen regional disparities and exacerbate the problems of low employer demand at local level.
‘Policymakers need to consider a wider range of measures, used in parallel with the National Minimum Wage and working tax credits, to combat in-work poverty.’
The Work Foundation says part of the solution is to ensure local authorities and their partners have the flexibility and budgetary controls to shape labour market policy and customise interventions that respond to local circumstances.
‘It is simply not possible to dictate the detail of policy design from the centre and expect this to work in an undifferentiated way across the UK,’ notes the report.
