From: "Saved by Windows Internet Explorer 8" Subject: Fairness matters more than speed when it comes to public sector cuts | Sophia Parker | Society | guardian.co.uk Date: Mon, 5 Oct 2009 12:42:13 +0100 MIME-Version: 1.0 Content-Type: multipart/related; type="text/html"; boundary="----=_NextPart_000_0000_01CA45B9.43264BD0" X-MimeOLE: Produced By Microsoft MimeOLE V6.0.6002.18005 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01CA45B9.43264BD0 Content-Type: text/html; charset="utf-8" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.guardian.co.uk/society/joepublic/2009/sep/28/public-spending-cuts-low-earners =EF=BB=BF Fairness matters = more than speed when it comes to public sector cuts | Sophia Parker | = Society | guardian.co.uk

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Fairness matters more than speed when it comes to public sector = cuts

In their zeal to cut = public spending=20 politicians must take care not to leave low earning households in=20 poverty

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Many low earners are caught in a demoralising cycle = of low=20 paid, insecure work and unemployment. Photograph: Oli Scarff/Getty=20 Images

As this year's conference season gets into gear with the latest = instalment=20 being the Labour get-together in Brighton, all the talk is of cuts. Who = can=20 slash hardest? Who can ease the pain of the downturn fastest? This is = seductive=20 talk, but it risks adding up to little more than macho posturing, which = obscures=20 the reality of the current situation in the UK. There may be green=20 shoots in the City, but the truth is that the long tail of the recession = =E2=80=93 in the shape=20 of job losses and business closures =E2=80=93 will continue to be felt = in living rooms=20 up and down the country for years to come.

The people who will be affected by this unemployment lag are not = those who=20 were first hit =E2=80=93 the bankers and white collar workers =E2=80=93 = but, instead, the seven=20 million working low earners in the UK, and the four million children = living in=20 their households. The recent rises in unemployment have struck hardest = at the=20 kinds of jobs low earners do, and the vulnerable sectors of the economy = in which=20 they are over-represented.

Low earners have lived at the edge of their means for a long time. = Our=20 research shows that 78% of low earners were in poor or critical = financial health=20 before the recession even began, with budgeting problems, high debt = repayments,=20 and inadequate savings to fall back on in hard times. Too rich to = qualify for=20 substantial state support, and yet too poor to appeal to private = markets, low=20 earners are juggling complex household budgets while reporting growing = levels of=20 stress and anxiety about their futures.

Of course, unemployment is a crisis for most, but given their already = precarious position, losing a job can trigger a spiral of decline for = low=20 earners. In this context, a slash and burn approach is far from what is = now=20 required. Instead politicians need to consider how to deal with the = public=20 spending squeeze in such a way that existing inequalities are not = reinforced.=20 This is the only way low earners will weather the recession, rather than = bearing=20 the long-term brunt of current economic circumstances.

The first priority must be to help low earners keep their jobs during = the=20 downturn. The German short-time working scheme is estimated to have = saved up to=20 400,000 jobs this year, with obvious benefits to the wider economy. It = seems=20 that some UK employers are adopting such schemes informally, and the = government=20 now needs to take a more pro-active stance to support such wage and = training=20 subsidies, to ensure that, wherever possible, workers are not lost to=20 unemployment.

For those low earners who do lose their jobs, the priority is to do=20 everything possible to get them back into sustainable employment. = Evidence shows=20 that many low earners find themselves caught in an exhausting and = demoralising=20 cycle of low paid, insecure work and unemployment. For these people, = smoothing=20 the transitions between work and benefits is essential. Linking = pre-employment=20 and in-work support for those workers who are at the sharp end of the = UK's=20 flexible labour market must be at the heart of the Back to Work white = paper=20 we are expecting this autumn.

Although glass ceilings matter, the even bigger issue for low earners = is the=20 continuing existence of a sticky floor. Whether or not they are in work, = all too=20 often "entry-level" jobs prove hard to escape and progression remains = elusive.=20 Low paid workers are offered less training by their employers, wherever = they=20 work, and while the government's commitment to expanding basic skills = programmes=20 should be congratulated, many low earners already have these basic=20 qualifications.

What they need now are accessible, marketable skills that enable them = to move=20 between jobs and sectors as the economy is rebuilt. Subsidised training = needs to=20 be carefully targeted at small businesses, where low earners are=20 over-represented, and where current skills provision is patchy, at best, = and=20 non-existent, at worst.

Without the savings of higher earners, and lacking the access to many = recession-proof benefits available to those who are less well-off, low = earners=20 depend on their earned income more than most. In this context we have=20 under-celebrated the hugely positive impact for low earners of the = introduction=20 of a national minimum wage and a system of tax credits. The vogue-ish = conference=20 promises being made by all three major parties to review tax credits and = universal benefits will need to be carried out with the utmost care, to = avoid=20 leaving thousands more families in poverty despite being in work.

It is low earners who are absorbing the shocks and contradictions of = this=20 recession. We must not kid ourselves that macroeconomic indicators of = recovery=20 reflect the reality for the UK's low earning households. When it comes = to cuts,=20 fairness matters more than speed. The costs of failing to recognise this = are=20 simply too high =E2=80=93 for each and every one of those seven million = individuals, and=20 for the economy at large.

=E2=80=A2 Sophia Parker is director of policy and research at the Resolution=20 Foundation

Posted by Sophia Parker Monday 28 = September=20 2009 11.05 BST guardian.co.uk

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