With monthly statistics highlighting GDP growth and a jobs recovery, it might be easy to forget that many families on low incomes are yet to feel the effects of an economic upturn.
Gingerbread’s ‘Paying the Price’ project shows that single parents are particularly affected by a combination of low-paid and insecure jobs, rising living costs and austerity cuts. Its latest report, The long road to recovery, shows that many single parents now face a toxic labour market characterised by low pay, job insecurity and under-employment. The figures are startling – two in five working single parents report being in low-paid jobs; a quarter of non-working single parents left their last job due to cuts in wages or hours, a temporary job ending or redundancy.
We’re calling for urgent action to reform the UK job market, which offers single parents too little opportunity to earn an adequate income and move out of poverty. In particular, we’d like to see the following three actions prioritised:
• Government should work more closely with employers to develop flexible working opportunities, as well as tackle low pay and job insecurity. Employers are a critical part of the employment puzzle – without their involvement, the business case for labour market change will not be embedded and best practice won’t be shared. Yet the government can still play an active role in pushing labour market change; for instance, it can draw on recent experiences of Living Wage employers, and encourage public sector employers and contractors to ensure all job vacancies are advertised with flexible working options.
• In-work benefits should be strengthened to ensure work incentives are maximised. Working single parents have been greatly affected by welfare reform, despite the rhetoric that the rationale for reform is to get people into work. In particular, single parents have been affected by cuts to childcare tax credits and council tax support localisation pushing up council tax bills. The welcome announcement of support for 85% of childcare costs under universal credit is still two or three years away for most single parents, and should be introduced in the current tax credits system to support those who need help now. The phased roll-out of universal credit also offers a chance to pilot ways to allow working families to keep more of their earnings.
• Employment support should move away from the ‘work-first’ approach. The focus on moving single parents off out-of-work benefits means they are often pushed into insecure or temporary jobs which result in cycling in and out of work. A move towards measuring Jobcentre Plus performance on sustained job outcomes – as with the Work Programme – would be one positive step. Investment in skills and training would also reap significant long-term benefits, with many single parents voicing frustration at the lack of training that would allow them to move into stable employment.
There is also an emerging concern around self-employment – nearly a fifth of working single parents surveyed had a self-employed job, and over half of these said they were low-paid. With the ‘minimum income floor’ under universal credit, there is a risk that many will be assumed to have a higher income than they do. Our case studies also suggest that support for those considering self-employment can be patchy, while others receive inappropriate encouragement into self-employment as a quick way to move them off Jobseeker’s Allowance. A rapid review of how self-employment works for those on low incomes is needed, in the context of working to tackle low pay and job insecurity.
We urgently need a joined-up approach looking across the low wage economy, in-work benefits and employment support to address the barriers faced by the bottom part of the UK labour market. Without action, the economy will lose out on the valuable contribution that the single parent workforce can make and the government will lose out on significant savings from moving single parents into work. Worse, we risk leaving single parents and others already disadvantaged in the labour market even further behind.
By Sumi Rabindrakumar, Research Officer at Gingerbread. Follow Sumi at @GingerbreadPA.
