A new survey shows the depth of concern over economic insecurityby Atif Shafique / January 19, 2018 / Leave a comment
This is the decade where our economy has broken records—for all the wrong reasons. It is set to be the worst ten-year period of productivity and pay growth for over two hundred years. To compensate, British households recently became net borrowers for four successive quarters—the first time since records began in 1987. There are now more people in poverty in working households than workless ones. The historic link between GDP growth and wage growth has severed; so too the link between employment growth and wage growth. Economists are baffled. The signs are that we may not just be experiencing a Japanese-style “lost decade,” but a lost generation.
My recent RSA report (in partnership with Nottingham Civic Exchange) argues that economic insecurity is a critical part of this story. To understand the challenges facing workers and families, the traditional lenses of poverty and inequality are important but insufficient. We also need an account of how economic insecurity—harmful volatility in people’s economic circumstances—impacts people’s lives and shapes their interaction with the economy.
Our research describes a number of features of this 21st century insecurity.
One is that a job no longer guarantees economic security. This is partly attributable to the rise of non-standard and atypical work (such as zero hour contracts), but more so to the prevalence of low pay, lack of in-work progression, precarious finances, and limited assets to protect against economic shocks. Three out of four people in the survey undertaken as part of our study feared that the cost of living would continue to outpace wage growth. Many are having to fill the gap in pay with credit and problem debt.