The Brexit vote underscores the need to address the economic marginalisation of the many people and communities across the UK who have been left behind by economic change. Ruth Lupton says it is time for inclusive growth to be on everyone’s agenda.
Since we joined the Common Market in 1975 (but not because of it), the British economy has been transformed. ‘Traditional’ manufacturing industries have declined, replaced by high-value knowledge-intensive sectors and an increase in service sector work, but not in the same places, and not with the same distribution of benefits. Wage ratios have increased, working poverty has increased and at the bottom end of the labour market, workers face greater insecurity with fewer protections.
Levels of poverty and inequality shot up during the 1980s and have barely shifted since. London and the South East have boomed while regional economies have struggled. Educated and largely urban elites have been the main beneficiaries of high paid, high tech jobs in global markets, while the less advantaged compete for service sector jobs demanding low skills and delivering low pay and precarious conditions.
The Need for A More Inclusive Economy
Bucket loads of analysis told us this was happening, but it seems to have taken Brexit to tell us that people have had enough and that something has to change. Economic growth for its own sake is not what is needed – it needs to bring better living standards and better life chances to a wider proportion of the population, reducing poverty and inequality. Our economy needs to be more inclusive.
In a report released today, the Inclusive Growth Analysis Unit sets out some of the opportunities and challenges for inclusive growth in Greater Manchester specifically, showing how global and national shifts have played out in our city-region.
On the one hand, Greater Manchester is doing relatively well economically compared with other UK cities outside London. With £57bn GVA generated in 2014, it is the third largest English city-region economy and has had the 3rd highest growth in economic output since 1997. Recent employment growth has been strong. There were 85,000 more jobs in 2014 than 2011, with a further 111,000 forecast by 2024.
But the nature of economic development is producing continuing inequalities. Virtually all of the job growth since the recession has been in the south of the conurbation, leaving northern areas still in need of an economic boost. Low pay is widespread – in 2015, 23.2% of GM jobs paid less than the UK Living Wage, compared with 20.6% nationally.
Levels of poverty remain shockingly high – with an estimated 620,000 people, including 180,000 children, living in poverty and 585,000 residents living in neighbourhoods which are in the most deprived 10% in the country. Poverty can have a long-term impact on a person’s life chances. Men in Manchester have the lowest healthy life expectancy (55.8 years) in England and there are high levels of health inequalities across the city region: the average man living in one of the poorest parts of Salford can expect to spend just over 46 years of his life in good health. Healthy life expectancy rises in the more affluent suburbs, stopping just short of 74 years for men living in the most affluent part of Stockport.
People from minority ethnic groups and those living with a disability face higher poverty risks and can struggle to access employment alongside carers and lone parents. The employment rate for people with a disability in Greater Manchester lags behind the UK average at 42.7%. 180,000 people of working age have no qualifications, and education and skills are very unevenly distributed around the conurbation. In 2015, 37.3% of people in Oldham and 33.9% in Rochdale had qualifications below NVQ level 2, compared with 18.8% in Trafford. All these figures suggest a huge waste of talent and energy which is surely holding back the city’s economy as well as being deeply unjust.
At the same time, although it isn’t the focus of our report, central government austerity measures have cut the incomes of the poorest, taking money out of the local economy, and services have been cut, including in crucial areas like adult learning.
Call to action
While the existence of poverty in Greater Manchester is no surprise, the size of the problem and the detail illustrated in the report must stand as a call to action on the part of politicians and policymakers, both nationally and locally.
In placing the economy at the centre of our analysis of why poverty persists on such a large scale in GM, we are calling for action of a different kind from that normally discussed in anti-poverty debates. We need, in Greater Manchester, to think hard about what kind of economy we need to raise incomes, well-being, inclusion and participation across the board, not just what kind of welfare state and public services.
How can low wages be raised and employment conditions improved? How can profits from economic activity be pumped back into our local economy? How can we provide jobs and training that give all young people a secure foothold in the labour market and enable people young and old to develop and contribute their skills and talents? How can job opportunities be widened for those living in peripheral areas, and transport organised so they can access them?
To answer these questions demands action not just from politicians but from all of us in Greater Manchester – our major anchor institutions, employers small and large, citizens and consumers. Inclusive growth has to be everyone’s agenda.