UNEMPLOYMENT / MAR. 19, 2014
version 3, draft 3

Cities Need "Better jobs and more of them" to Reduce Poverty Pockets, Study Finds

A study by the Joseph Rowntree Foundation has found that "better jobs, and lots of them" are needed to reduce poverty in UK cities. 

Findings show that the quality and quantity of jobs is the most important link between economic growth and poverty. 

Cities are seen as the "drivers of the national economy" with the UK devolving new powers to the largest and fastest-growing urban areas, yet these areas also tend to have concentrations of poverty.  

Findings 

The main finding of the research was that economic growth is no guarantee of reducing poverty. In some economically expanding cities, poverty has stayed the same or worse, increased. 

It is, according to the study, employment growth that has the greatest impact on poverty. If jobs are low-paid or go to workers outside of the area, then the impact on poverty is minimal. 

Conversely, poverty can worsen during times of economic growth in cities as the cost of living increases.  

Tackling poverty 

In response to the problem of increasing poverty, some cities have been seen to either:

  • promote employment in expanding sectors 
  • providing training for disadvantaged groups

In this way, the wealth of opportunities associated with major economic growth can be shared. 
 
Major cities need to follow suit to ensure underrepresented groups are not "cut off" from sharing in new found economic growth.  

How poor is poverty? 

People are defined as being in poverty if their household income is below 60% of the median income for all UK households. In 2011/12, this poverty threshold for a single adult was £128 a week, and for a couple with two children, it was £357. 

The research to identify the link between how employment and output growth impacted on poverty was conducted by looking at 60 of the largest cities in the UK between 2000 and 2010. 

The study showed an increase in economic disparities between UK cities with London and surrounding cities experiencing more rapid growth than other areas.  

Despite the economic growth, this did not equate to a reduction in poverty, according to Dr Lee, Assistant Professor in Economic Geography at LSE: 

"London accounted for 37 per cent of the country’s growth in economic output in the past decade, but poverty levels remained stable and even increased in some parts of the capital."  

The findings showed that employment growth has the greatest impact on poverty, but it is very dependent on context. For example, if jobs are low-paid and lack the opportunity for progression, the impact on poverty can only be minimal.   

Researcher, Dr Lee said: "Cities are increasingly seen as the driver of economic growth, yet cities are also where much of the poverty is located, suggesting that the benefits of growth are not shared by everyone in society,"

The researchers found that progression within the workplace was one of the key routes out of poverty, particularly for people in low-paid, low-skilled work.  

The authors identified examples of how cities could tackle poverty; combining the resources of local government, employer-led training programmes and the promotion of a living wage - thus aligning the strategy for economic growth and poverty reduction.  

  

Notes:  

Study: Cities, growth and poverty: evidence review 

Image with credit to Dom Crossley of Flickr (Creative Commons License) 

 

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