Government needs to help the poorest workers

First Minister Nicola Sturgeon with new poverty advisor Naomi Eisenstadt during a visit to the Cyrenians charity in Edinburgh. Picture: PA

‘The best route out of poverty is work” said the Chancellor of the Exchequer, George Osborne, while outlining his Budget Statement earlier this month.

The priority placed on employment is also clear within Scotland’s Economic Strategy.

“Bringing more people into the labour market”, it states, “is the key to tackling poverty, inequality and social deprivation and improving health and wellbeing”.

This might be true, at least in part, but only if the labour market delivers decent work.

Work can help provide purpose and dignity, as well as, crucially, an income.

Yet too often it fails to provide economic independence, while damaging health and well-being.

The latest poverty figures published last month show a welcome return to the downward trend in Scotland after the previous year’s rise.

Yet, half of working age adults in poverty – and more than half of children in poverty – live in working households.

A recent report from the Joseph Rowntree Foundation shows that those on the minimum wage continue to fall short of a basic standard of living.

Compared to what the public say is needed for an acceptable living standard it finds that single adults on the minimum wage were £27 short in 2008, and £52 short in 2015.

Couples with two children were worse off: £31 short in 2008, and £74 short in 2015.

Too many people – whether single adults, couples or parents – do not have sufficient income.

Estimates suggest that more than 400,000 workers in Scotland, two thirds of them women, are paid less than a living wage.

The Chancellor’s proposed “national living wage” of £7.20 an hour from next year – rising to £9 by 2020 – is a welcome step towards raising wages for the lowest paid, at least for those over 25 for whom it applies.

However, it still falls short of the actual living wage, calculated on the basis of what the public say is needed for an acceptable standard of living, which is currently £7.85 an hour, and is predicated on full take-up of tax credits and other in-work benefits, which the Chancellor has cut.

We cannot give to low-income families with one hand and take more away with the other.

What is more, the rise of in-work poverty is not solely down to low pay.

In recent years we have seen large increases in insecure work – the STUC estimate there are 120,000 people in Scotland on zero-hour contracts – as well as part-time work and low-paid self-employment.

This is leading to a revolving door of people falling in and out of the labour market.

Improving job quality could help break this damaging cycle.

Oxfam’s Humankind Index, created in consultation with 3,000 people across Scotland, showed that people value satisfying, secure and suitable work – as well as a sufficient income.

Work often fails to deliver across any of these fronts despite research suggesting employers who provide decent work have lower staff turnover, higher levels of morale, and lower sick levels.

Our health and wellbeing, our social relationships, and even our identities are created and impacted by our experience of work.

Too many people have stressful, demanding jobs which, when combined with a lack of control over their day-to-day tasks, are bad for their health.

This is compounded by an increasingly polarised labour market in which people at the bottom feel undervalued and those at the very top seem to earn exorbitant salaries.

As Martin Taulbut of NHS Health Scotland told MSPs on the Scottish Parliament’s Economy Committee last month, a perceived imbalance between effort and reward: “increases the risk of not only premature mortality but of illness more generally”.

We must also remember the societal benefits delivered by those doing unpaid work, which is too often ignored or undervalued.

Encouragingly, there seems to be momentum behind improving job quality in Scotland.

The Economy Committee are conducting an inquiry into “Work, Wages and Wellbeing” and the Scottish Government’s Fair Work Convention is also tasked with promoting “a fairer workplace”.

Meanwhile, the First Minister has named Naomi Eisenstadt an adviser on poverty and inequality.

It is critical she is now given the powers and resources to speak with, as well as for, people with experience of low-paid jobs, and to transparently scrutinise Government policy.

These initiatives, combined with Social Justice Secretary Alex Neil’s “national discussion” about creating “a fairer Scotland”, have the potential to produce significant progress.

To succeed they must focus on improving the quality, as well as quantity, of work in Scotland.

Only then will work truly serve as the route out of poverty we need it to be.

• Francis Stuart is policy and research adviser with Oxfam Scotland.