Belfast Telegraph

Thursday 18 December 2014

New jobs must push people out of poverty

No gravy train: people want work to take their children out of poverty, but Sammy Wilson has said the public sector can’t do it

Yesterday's report from the Rowntree Foundation was a timely reminder that the policy challenge isn't just to create jobs, it is to create well-paid jobs, which can lift people out of poverty.

Low pay and reduced job security in parts of the private sector are key outcomes of the recession. Sociologists have even coined a term for the growing number of people - many of them agency workers - who live this blighted existence. They call them the 'precariat'.

The precariat are workers likely to be laid off, working part-time for low wages and turning up when they are asked.

Many are found in agency jobs in what was once the public sector - cleaning, caring, or clearing up our mess, as required.

The Rowntree report showed working hard does not necessarily keep a family out of poverty. Half of children living below the Government's official poverty line have at least one parent working.

In all, 69% of these children, who generally get free school meals, leave school without the five GCSEs which are generally necessary for a reasonably-paid job and are unlikely to get into higher education.

Being in the precariat, the fear of being pitched into it and the likelihood your children will continue in it helps explain much of the cynicism about politicians.

For people living at, or near, the minimum wage, Stormont salaries look like a gravy train. For people not knowing if they will be working next week, the four years' job security an MLA, or MP, enjoys is enviable, not something that should be compensated for by an enhanced publicly-funded pension once it ends.

There are clearly political and social implications to all this. If politicians can't increase living standards and allow a large poor working underclass to develop, then they risk social unrest and the emergence of new political movements offering solutions.

To be fair, the danger is recognised by more than Rowntree and the poverty lobby. As the economy is rebalanced away from the public sector, where wages comparable to the rest of the UK are paid, to the private sector, where they lag and job security is often less, the Executive has prioritised raising private-sector wages.

Invest Northern Ireland has been tasked to promote 25,500 new jobs by 2016, but not just any jobs. Its next corporate plan will specify that 75% of those from foreign direct investment and 50% from local business growth must pay salaries above the private sector median. The average salary for jobs from inward investment is already £30,000.

The problem is that there aren't enough of them yet and the precariat are unlikely to get these jobs.

There is a big onus on the local private sector to step up instead of just complaining public-sector wages are too high. As Sammy Wilson has pointed out, that doesn't wash at a time when the public sector is not recruiting.

Many businesses want to compete to supply public services. Politicians can set the standards for these contracts.

This power should not be used to push more voters and their children into poverty.

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