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Helen Barnard
Programme Manager
Helen Barnard

A strong economy isn’t enough to eradicate poverty

Authors: Helen Barnard Programme Manager at Joseph Rowntree Foundation

08 April 2014

Over the last few years we have seen the negative effects of recession on employment, pay and public services.  But that doesn’t mean a return to growth will necessarily lead to lower poverty. A new report from the Work Foundation demonstrates this powerfully.  London has strong growth, a vibrant labour market, and more qualified people than in the rest of the country. By 2012 there were more jobs in London than before the recession. However, youth unemployment in London is at 25 per cent – significantly higher than the national average. 

The report makes three key recommendations to tackle youth unemployment in London:

-       Improving access to careers advice and increasing employer engagement.

-       Better access to apprenticeships, traineeships and jobs, especially for young people from ethnic minority groups.

-       Reducing travel costs for young people moving into work and supporting them to progress once in work.

JRF’s evidence supports this. We do not just need more jobs; we also need better jobs and better access to those jobs for people in low income households.  This will require concerted action from employers to support development and progression for low paid workers.Leadership from Central Government needs to complement action from local authorities, Local Enterprise Partnerships, Jobcentre Plus and other service providers to encourage more employers to use and reward skills. Tinkering with the welfare system will never be enough to solve in work poverty, we need to think about promoting innovation in low paying service sectors in order to improve productivity and pay.  

The report sets out a detailed analysis of the reasons for high youth unemployment in London, including high competition for jobs and a lack of apprenticeships. Across Britain as a whole there were three benefit claimants for every vacancy advertised at Jobcentre Plus in 2012. In London this rose to five for every vacancy.  That does not include all those who are in part time jobs but want to work full time or those not claiming Jobseekers Allowance but looking for work.  It also doesn’t include commuters. Competition for apprenticeships is even higher. In London there are 17 applications for every vacancy.

However, this report also illustrates the importance of looking behind headline  figures; the picture varies greatly according to three factors.

Geography

Levels of youth unemployment are very different across London, as is the number of people competing for each job.  This reflects where the jobs are, the characteristics of the people living in different areas (particularly levels of poverty and education) and willingness and ability to travel to jobs.

Ethnicity

One of the starkest findings in the report is the different rates of youth employment among different ethnic groups. 86 per cent of white British young people were employed, compared to 68 per cent of Black African and Caribbean young people in 2011. .  The importance of understanding the role of ethnicity is reinforced by much of JRF’s research in this area. A 2007 study showed that in-work poverty was much higher among ethnic minority groups than the White British Population. Forthcoming and recent research show the ways in which caring responsibilities, social networks and local services can have very different impacts across ethnic groups, but also emphasises the importance of class and gender alongside ethnicity.

Qualifications

Previous research has shown that people with low skills have less chance of being employed in Inner London than elsewhere in the country.  The Work Foundation’s new Census analysis demonstrates that the employment prospects of young people with no qualifications were equally as poor in London as in the rest of England.  However, young people with qualifications at levels 1, 2 and 3 were much more likely to be unemployed than similar young people elsewhere.

The Joseph Rowntree Foundation has found that to tackle both unemployment and in-work poverty more effectively, policy makers need to ensure that the solutions work for all groups and all places across the UK.  That requires stronger leadership at a local level, as well as better analysis and monitoring nationally.

 

Helen Barnard is the programme manager at the Joseph Rowntree Foundation (JRF)