Cycles of poverty and unemployment

One thing politicians can agree on is that "work is the best route out of poverty"… but, as employment grows more insecure, it is becoming ever clearer that getting a job does not provide a solution on its own. In the last few years, the number of people 'cycling' between unemployment benefit and a short-term job has risen by a massive 60 per cent. This raises the worry that when it comes to employment as a way of lifting people out of poverty, many are merely bumping along the runway and never taking off.

Our research programme published today explores some of the issues as experienced by employees and employers, as well as learning about the causes of cycles of poverty from a national panel survey going back to the early 1990s.

A plain message from the work is that employment does not provide a sustainable route out of poverty unless job security, low pay and lack of career progression are also addressed.

Underlying growth in the extent of in-work poverty has destabilised strategies to reduce poverty and inequality. As the case studies carried out for the programme show, some employers are responding to fluctuations in demand for the services their businesses provide by resorting to temporary and agency-based workforces.

What is interesting is that it seems the ethos of the company is a key factor driving those kinds of human resource decisions. Similar employers in the same sectors were managing to cope perfectly well with a more permanent workforce alongside alternative strategies for coping with fluctuations in demand. Serious improvements to employment conditions could therefore be relatively easy to make.

The UK Government has recently laid before Parliament the EU Directive on Agency Workers after much delay and debate. This should help a lot of the people who were interviewed for our programme but many other improvements are needed as the economy stutters back into life.

'Living wage' campaigns have much to offer and our extensive research has shown how they can be soundly-based on what the public and experts agree is enough to live on in modern Britain. Public sector employers are more commonly adopting a living wage policy, especially in local government, but they also need to look at their purchasing and contracting decisions so as not to exacerbate the use of low-paid, insecure jobs by contractors. Services for people in or looking for employment need to take on board the programme's lessons about the dynamic nature of income, because if they do not, we risk getting stuck in a vicious cycle ourselves in terms of alleviating poverty.