Workers are more fearful for their economic future than ever before, as the link between employment and prosperity risks permanent fracture, new research suggests today.
It finds four in five Britons fear inflation will outstrip their pay including many of those who deem themselves “just about managing” - or “JAMs” - a phrase used by Prime Minister Theresa May when she took office.
And the study by the Royal Society of the Arts (RSA) found JAMs worry more about pay, progression and in-work poverty than any other group - even those considered the poorest.
The findings are likely to be seized upon as a damning indictment of May’s efforts to help those squeezing pounds and pence to get by since she gave a flagship address on the issue in Downing Street two years ago.
A survey commissioned as part of the analysis uncovers economic worries among four main economic groups, including:
- High housing costs, affecting an overwhelming majority of those just about managing, and those not managing to get by;
- The fear of relocation due to insecure housing, including among those just about managing;
- Personal debt worries, especially among those not managing to get by;
- And inflation outstripping pay, which remains the biggest concern of those not managing to get by;
Meanwhile automation, an ageing population, and climate change, alongside Brexit uncertainty, could make this situation worse, researchers cautioned.
They highlight the failure of traditional policy to halt the rising economic anxieties of those in-work.
The report, Addressing Economic Security, suggests a universal basic income (UBI) as a potential solution to the issue.
Such a policy would provide a standard level of income and allow people to build savings and support themselves in an increasingly volatile labour market.
UBI is one of the policies suggested as part of a review into modern work commissioned by the government last year.
Atif Shafique, a senior researcher at the RSA, said: “Having a job is no longer a guarantor of economic security: more than 7 million people in working households live in poverty, wage growth lagged behind inflation for most of the last decade, and close to 8 million people in the UK live with problem debt.
“But to help ordinary working families take ownership of their lives, local and national policy-makers must reshape policy around economic security too: becoming more strategic in when services intervene, preventing problems before they happen, and more expansive in who they help, as automation and other challenges affect people across the income spectrum.”
‘Pay crisis should be priority’
Dr Paula Black, director of Notttingham Civic Exchange, which co-authored the sudy, said: “As policymakers increasingly discuss ordinary working families it is important they understand the way that economic insecurity impacts their lives and that the subjective element of how people feel is important in this.”
Trade unions said the research showed working people are facing lower real wages than before the 2008 financial crash.
TUC General Secretary Frances O’Grady said: “Working people are in the middle of the longest pay squeeze since Napoleonic times, with real wages still lower than before the financial crisis.
“The pay crisis should be the government’s first priority. We need a plan to get wages growing with more investment, and a higher minimum wage. And we need stronger rights for trade unions, so that workers can negotiate the pay rises they have earned.”