An appropriate ‘national living wage’ is likely to have a considerable impact on improving the social quality of the lives of the working poor
In this post Mark Tomlinson, Liam Foster and Alan Walker from the University of Sheffield give us an insight into their latest article in the Journal of Social Policy on the link between the working poor and social quality.
When George Osborne, Chancellor of the Exchequer, made the surprise announcement of a new ‘national living wage’ in the post-General Election this created much discussion. He announced that a mandatory ‘national living wage’ is due to be introduced from April 2016 for workers aged 25 and above, initially set at £7.20 – a rise of 50p relative to the current National Minimum Wage (NMW) rate. Whether this constitutes an accurate ‘living wage’ is highly debatable and critics such as the Living Wage Foundation suggest it is no more than an increase and rebranding of the NMW.
The British government’s rhetoric over the last few years has been that any job should be a stepping stone out of poverty and that gaining qualifications and training via work experience should alleviate the worst symptoms of deprivation. In-work poverty has implications for people’s capacity to move off benefits and can also affect employee morale, absenteeism, labour turnover and productivity. However, the prevalence of households in both work and poverty is and has become a significant political issue, as well as a social and moral one. But what are the effects of in-work poverty on social quality?
It is within this context that our paper in JSP is published, exploring social quality – which is concerned with the quality of society, or social relations – in relation to the policy issues of low pay and the working poor. Social quality is concerned with the extent to which people are able to participate in the social, economic and cultural lives of their communities under conditions which enhance their well-being and individual potential. Using Confirmatory Factor Analysis models in conjunction with the British Household Panel Survey (BHPS) this paper reports the first application of the concept of social quality to a UK data set.
The use of social quality as a focal point exposes important variations in social quality experienced by different occupational groups and uncovers significant occupational and poverty interaction effects on key dimensions. This analysis reveals several striking characteristics. In terms of poverty per se poor employees are worse off in terms of economic security, housing, health, human capital, trust, voluntarism, citizenship, knowledge and culture whichever part of the employment structure they belong to. Even those in the so-called upper level of the labour market (professional, managerial occupations which require reasonably high levels of skill and motivation) are significantly worse off on these dimensions if they are low paid. So being poor almost always has a further penalty whichever tier of the occupational structure one occupies as income has a considerable impact on social quality across the occupational spectrum.
Not only is the labour market seriously skewed in terms of qualifications (that there is a growing mass of relatively able, educated and skilled workers in poorly paid and unskilled jobs – often part-time – with few prospects), but that even at the top of the occupational hierarchy low pay has a potentially deleterious impact on the lives of these employees. Couple this with high economic inactivity rates and high unemployment and there is a serious handicap to economic growth and the potential goal of reducing the welfare budget is not going to recede.
One potential policy conclusion that is briefly explored in the paper is the idea that employers should be encouraged to pay significantly more than the minimum wage and pay an appropriate ‘living wage’ to their employees. This may be particularly pertinent for a growing number of workers with decent qualifications on low wages with student debt. In addition, those in the lower tiers of the occupational structure also need more help to escape from the low-pay-no-pay cycle so prevalent among this group. This requires more targeted training and assistance at the workplace and an acknowledgement by government that the quality of jobs matters. The problems revealed in the analysis here will not abate without better quality full-time employment opportunities being generated.
While we suggest that measures to raise low pay, such as an appropriate living wage, are likely to have considerable implications for social quality there is much still to be done in order to improve the social quality of the working poor.