Following the launch of the RSA's report on Economic Insecurity in partnership with Nottingham Civic Exchange we have commissioned a series of blogs by NTU academics which examine different aspects of economic insecurity. This first post by Dr Paula Black outlines the importance of this issue for Nottingham.
Are you part of the group who are described as Just About Managing? Is your household income between £12,000 - £34,000 after tax and benefits? As importantly, do you feel that you are struggling to make ends meet and worrying about the effects of increasing economic insecurity? If so then you are not alone. Figures released by the Office for National Statistics on 9th January show that:
For the first time in over two years, consumers reported a worsening of their perception of their own financial situation for two consecutive quarters
Office for National Statistics, Economic well-being: July to September 2017
Economic insecurity is about affect and economy. It is about the objective economic context but it is experienced on a psychological level and is lived out in households and communities. To talk about the chronic productivity gap is one way of approaching what for the individual may manifest as wanting to work more hours than are being offered by their employer, and the impact that this has on household finances and the ability to plan for the future.
Current economic conditions are partly the result of global and national economic forces which reached their peak during the recent recession but which were unfolding in the decades before. However, the ways in which these economic factors have been shaped by policy decisions are not inevitable.
What can we do in response? We could wait for the economy to shift, for Government to devolve new powers or for future opportunities to be identified following Brexit. Or we could make economic security a goal within our current policy framework.
The RSA’s report Addressing Economic Insecurity is launched today in partnership with Nottingham Civic Exchange. It looks at a broad range of factors which have contributed both to the increase in economic insecurity and the psycho-social impact this is having. We also offer the beginnings of a policy framework to tackle economic insecurity.
For us here in Nottingham and Nottinghamshire this is important. Our report ‘Out of the Ordinary’ found evidence of comparatively suppressed wages in the city, income disparity between the city and the county, issues of housing affordability and significant numbers of our residents employed in low pay, low productivity sectors. However, there are positive initiatives going on from the use of procurement strategies to strengthen local economies, the embedding of apprenticeships into large infrastructure projects, to a strong focus on early intervention strategies.
Around the country inclusive growth strategies are being developed. These aim to move away from the ‘growth first, redistribute later’ model to one where inclusion is a core part of growth strategies. Key here is to focus upon high employment, low pay, low productivity sectors as small improvements here have disproportionate impact on household financial resilience and broader economic security for the place.
Nottingham Civic Exchange and the RSA have worked with the D2N2 Local Enterprise Partnership to consider the positive impact an inclusive growth policy focus would have on a refreshed strategic economic plan for the area. Read our report online.
Large anchor institutions such as universities, hospitals and Local Authorities can use their budgets to foster economic security through procurement and ensuring good pay and conditions for their own staff. For example, in Preston an initiative has been developed to ensure that the large amounts of money ‘leaking’ out of the local economy were instead invested in local businesses and, in particular, cooperatives and social enterprises, with some success.
Whilst paying the Living Wage is important, security and predictability of employment, progression routes for those in lower skilled occupations and employee say in the workplace are also vital in ensuring ‘good work’. Matthew Taylor, our Visiting Professor in the School of Social Sciences, completed his Review of Modern Employment practices in 2017 which is awaiting an official Government response.
Crucially, we can do more to both understand the impact of economic insecurity at household and community level and to help to build resilience there. CitizensUK offers one model of how community organising can highlight issues of concern to communities, suggest policy changes, and hold policy makers to account.
At Nottingham Civic Exchange we are developing research which examines how household and community resilience can be strengthened by different types of support.
The agenda then for increasing economic security is broad and varied. Our report today and the focus of our work in the coming year will be to further develop this agenda and to show how economic insecurity is not an inevitable part of the economic system, but the result of policy choices which can be shifted.
Director, Nottingham Civic Exchange