Insecure Work Series: Why insecure work is a barrier to levelling up

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Image of rows of terraced houses and green trees © Photo by Benjamin Elliott on Unsplash

The United Kingdom is widely considered to be one of the most regionally unequal countries in the industrialised world. Stark gaps in economic performance exist across the country, with many communities experiencing significantly low levels of productivity and prosperity. The long-awaited ‘Levelling Up the United Kingdom’ White Paper, published by the government earlier this year, represents the latest attempt to address these disparities. However, this failed to sufficiently consider how increasingly insecure employment contributes to the economic challenges faced by vulnerable communities.

The Work Foundation’s UK Insecure Work Index has demonstrated the sheer scale of precarious, unprotected, and low-paid work in the UK. In 2021, an estimated 6.2 million UK workers (19.8%) experienced severe insecurity in the labour market. It is likely that this ‘great risk shift’ will continue as employers adopt more flexible labour practices in response to ongoing global economic instability. For many workers, however, this will mean increased financial uncertainty and anxiety about how to make ends meet.

What does this insecurity mean for communities, and how can those that are already most vulnerable successfully ‘level up’ against this backdrop?

Regional inequalities of insecure work

We know that different groups are more likely to experience severely insecure work. According to the Work Foundation, younger workers, disabled workers, women, and individuals from ethnic minorities are all more likely than average to be engaged in severely insecure work.

It is likely, too, that different areas of the country are unequally exposed to, and impacted by, insecure work. For example, ONS data suggests that, since 2013, zero-hours contracts have tended to be most prevalent in the North East, East Midlands, and South West of England. Meanwhile, TUC analysis has found that, overall, insecure work is particularly prevalent in Wales and Northern Ireland.

The particular local dynamics of insecure work are likely to be determined by an area’s industrial structure. The UK Insecure Work Index shows that those employed in the hospitality, services, and agriculture sectors are more likely to experience severely insecure work. Where these sectors are more prominent within a local economy, we should expect to see a greater prevalence of people in insecure work. However, further research will be required to map the UK’s regional and local disparities in labour market security more precisely.

How insecure work holds back local economies

Identifying spatial inequalities in the scale and severity of insecure work will help us understand how this impacts local prosperity. Indeed, high levels of insecure work may contribute towards local vulnerability and deprivation in a variety of ways:

  • Increasingly casual or temporary forms of employment destabilise workers’ incomes and make household finances less predictable. This leaves many insecure workers at increased risk of significant debt and in-work poverty.
  • As a consequence of their financial vulnerability, many insecure workers are increasingly reliant on rogue landlords and pay-day lenders. This exacerbates household insecurity and disproportionately extracts wealth from the community and the wider local economy.
  • Unstable incomes also limit consumer confidence and spending power within the local economy. This dampens the capacity for local businesses to thrive in the area.
  • There are strong correlations between low quality employment, low productivity, and low innovation. Widespread insecure work, in particular, risks undermining competitiveness and exacerbating the existing performance gaps faced by certain communities.
  • The Marmot Review has highlighted the negative impacts of insecure work on physical and psychological health. Poor health already acts as a significant barrier to economic participation and prosperity, particularly in deprived communities.

At a local level, insecure work risks undermining many of the conditions for meaningful community wealth building. Addressing insecure work will therefore be particularly essential to help level up the most vulnerable and deprived communities.

What this means for policymaking

It has long been recognised that it is not just work, but decent work, that helps to reduce poverty. However, recent labour market interventions have tended to focus on increasing the quantity of local employment, with less emphasis on improving job quality and security.

Although the national levelling up agenda has been overshadowed by recent Westminster instability, local policymakers can nonetheless strive to address regional inequalities in prosperity by combatting insecure work. Indeed, this will be particularly critical in areas where significant deprivation is combined with high rates of precarious employment.

Many local policymakers are already working to improve the quality and security of local labour markets. For example, Liverpool City Region and Greater Manchester Combined Authorities are introducing employment charters that seek to curb the use of insecure contracts among local businesses. Such local coordination, and regulation, of the labour market will be increasingly necessary to challenge the proliferation of low-wage, insecure work. Only by building a shared commitment to living wages and living hours across local labour markets, and challenging the normalisation of insecure employment, can we begin to truly level up the UK.

Dr James Hickson is a Research Associate at the Heseltine Institute for Public Policy, Practice and Place (University of Liverpool).


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