100-day countdown: Greater Manchester mayor must get to grips with region's in-work poverty problem

Creating more and better jobs for people living in Greater Manchester must be the number one priority for the region’s incoming mayor

Today marks the 100-day countdown until voters elect new mayors in several city regions. In its briefing for the candidates standing in May’s elections, JRF says the new post gives Greater Manchester an opportunity to lead the country in delivering inclusive growth – growth that benefits everyone living in the city region.

With half a million people income deprived and one in four children living in poverty, the briefing provides recommendations for the Mayor to create an economy that helps solve poverty.

Greater Manchester performs relatively well compared to other major UK cities on job creation and private sector business growth. But JRF finds low pay and low skills continue to lock people out of the city region’s economic success:

  • Median full-time wages are £50 per week lower in Greater Manchester (£494) than they are nationally (£545). There is also substantial variation within the region, with average weekly wages in Tameside at £460 per week, compared to £601 in Trafford.
  • Nearly a quarter (23%) of workers in Greater Manchester are paid below the voluntary Living Wage, similar to the England average. 250,000 employee jobs in Greater Manchester paid less than the voluntary Living Wage.
  • 160,000 working families in Greater Manchester receive tax credits to top up low wages.
  • 180,000 working age people have no qualifications in Greater Manchester.

The briefing also highlights how GM’s economic growth is not reaching all households. Greater Manchester has a higher proportion of households with no-one in work (18.4%), a higher unemployment rate (6.5%), and higher proportion of working age adults who are economically inactive (24.5%) than England as a whole (14.9%, 5.1% and 21.9% respectively).

To deliver inclusive growth, JRF recommends the mayor:

  • Raise productivity in low-paid sectors. Greater Manchester has identified health and social care, retail and hospitality and tourism as among its priority sectors. Low pay is prevalent in these sectors, so the Mayor should work with businesses and industry bodies to develop strategies to increase productivity, as higher productivity is a path to higher wages.
  • Support growth sectors to reduce poverty by working with businesses to address issues such as skills shortages or high staff turnover and connect people in poverty to job opportunities in growing sectors of the economy.
  • Use procurement powers to support job creation. Where local economic development activity leads to new jobs (both when new developments are being built, and the jobs that then follow), or local anchor institutions (the biggest local spenders and employers such as local authorities, universities, NHS) are recruiting staff, they should make sure local people with barriers to the labour market benefit. The Mayor can support this to happen by using planning obligations to broker training and employment support packages to connect people to opportunities.
  • Trial services to support people to progress in work – simply getting a job is not always sufficient to escape poverty, and four out of five low-paid workers fail to fully escape low pay over 10 years. Greater Manchester should make the ability to progress into better paid jobs a key part of its offer, and trial different approaches to supporting progression in work. Trials should combine coaching and support from advisers able to foster links with employers, well-targeted training linked to realistic career progression opportunities and financial incentive payments. 
  • Use new transport powers to connect people in disconnected deprived areas to job opportunities, and make poverty reduction an explicit part of the transport authority’s remit.
  • Use their influence by making inclusive growth an explicit aim of their time in office. In the Mayor’s first 100 days, their first actions should be to:
  • Create a cabinet position with responsibility for Inclusive Growth, integrating social and economic policy.
  • Set ambitious targets to focus action on the employment rate, and boosting educational attainment from the early years to adult skills.
  • Convene stakeholders across business, economic development, employment and skills providers, education and early years providers, other public service providers and civil society to develop a city-region wider strategy for inclusive growth and solving poverty.

Katie Schmuecker, head of policy at JRF, said:

“Manchester and the wider city region has enjoyed a remarkable transformation over recent decades and has become an emblem for the Northern Powerhouse. But too many people have not benefitted from its economic success. Hundreds of thousands of people are experiencing income deprivation and poverty in Greater Manchester, both when they’re working and when they’re not.

“The election of a Mayor provides a golden opportunity to deliver inclusive growth: growth that benefits everyone living in the city region, enabling a stronger and more sustainable economy, reducing the demands on public spending and benefiting society. Creating more and better jobs and connecting people in poverty to opportunities are at the heart of an inclusive growth agenda – and this should be the number one priority for the Mayor when they take office in May.”