Addressing economic inequality at root
Photo credit: Beverley Goodwin
July 10, 2014 // Written by:
- Universal provision of high-quality childcare that is affordable for all. High-quality childcare can transform life opportunities for children and will help to address unequal starting points. Making it equally available and affordable to all families would give parents more choices about balancing their families’ needs and their working lives.
Policy priorities: Public funding supporting the supply of childcare in order to cap family childcare expenditure at 15% of income; increased standards of training and qualifications to ensure childcare is always high quality; and better working conditions for childcare workers, including a Living Wage, stable contract hours and career and pay progression opportunities.
- Narrow the difference between top-to-bottom earnings and rebuild the link between economic prosperity and wages. Over time, the proportion of UK economic prosperity shared out as wages has shrunk in favour of shareholder profits. Within this smaller wage share median wages have fallen while pay at the top has sky-rocketed. Concerted action to restore wages and shrink the income gap would create a healthier economy and address in-work poverty.
Policy priorities: Ensure workers have a collective voice in workplace decision-making by law; establish a Department of Labour tasked with restoring wages in the economy and improving working conditions; establish a stronger wage-floor to eliminate in-work poverty; and enforce pay ratio reporting to address wage differentials.
- Access to valued careers for all with opportunities for progression and skills development. Non-graduates are being increasingly funnelled into low-paid, dead-end jobs with little or no prospects of future progression. Addressing the lack of investment in training and development for staff and managers would broaden opportunities for purposeful and rewarding work.
Policy priorities: Promote pooled training investment by sector; invest in incentive structures to improve high-quality management skills at different levels; use state support to ensure apprenticeship schemes lead to progression at work across more industries; and establish better education, training and employment links at the local level.
- Creation of good jobs for all that benefit workers, the economy and society. Everyone should have the right to a well-paid, secure and meaningful job. But the current jobs market is hugely unbalanced, both in terms of geography and job quality. We need to invest in good, environmentally sustainable jobs around the country.
Policy priorities: Co-ordinate and co-produce a national industrial strategy; establish a state investment bank with regional focus; funding for better jobs and training to guarantee full employment; and reform business to ensure workers have a collective voice.
- A fairer, more progressive tax system. When you take account of direct and indirect taxes, those on low incomes in the UK are being hit too hard, while billions of pounds each year are being lost through tax avoidance and evasion at the top. Progressive tax reforms would help to address inequality at root as well as redistributing economic power.
Policy priorities: Strengthen legislation and resources to abolish tax avoidance and evasion; implement and co-ordinate more progressive income and wealth taxes; establish a Land-Value Tax; and shift the tax burden onto environmentally unfriendly activities through green taxes.
There is no silver bullet for tackling economic inequality: the interconnections between different areas mean that a package of bold interventions is required, with each policy step reinforcing the next. While not exhaustive, we believe this report, produced in partnership with Friedrich-Ebert-Stiftung London, covers the most pressing issues and provides a clear starting point for determined, coordinated action.
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