Good jobs in Scotland – More than two thirds of children in poverty live in working households

This research aims to inform the development of the Poverty and Inequality Commission’s (PIC) advice and recommendations on how the Scottish Government can support the creation of more ‘good jobs’ and reduce in-work poverty as part of the next Child Poverty Delivery Plan.
‘Good jobs’ are defined as secure and meaningful work, with fair pay and conditions, adequate options around flexibility, and opportunities for progression, that can effectively contribute to reducing child poverty.
Despite strong employment growth, Scotland has seen weak pay growth which, combined with benefits cuts, has affected household incomes, particularly those at the bottom of the distribution.
▪ More than two thirds of children in poverty live in working households. Having paid work is an effective way out of poverty, but having a job is not always enough. For example, when it does not pay well, or when someone is unable to work enough hours.
▪ Scotland’s labour market was characterised by strong employment growth and weak pay growth prior to the coronavirus pandemic. Weak pay growth is reflected in weak growth in household incomes among working age adults over the last decade.
There has been a relative improvement in pay in Scotland and trade union membership has remained stable between 2011 and 2019. However, other measures of job quality – underemployment, employer investment in development opportunities, and overemployment – have worsened.
▪ There has been a substantial fall in the proportion of full-time workers in Scotland earning less than the Real Living Wage (RLW). An estimated one in seven workers in Scotland in 2020 were earning less than the RLW.
▪ The use of zero-hours contracts has risen in Scotland, but temporary work (both voluntary and involuntary) has fallen over the same period.
▪ Underemployment fell in the decade prior to the pandemic but has recently risen from 9.5% in 2019 to 11% in 2021.
▪ Fewer employers in Scotland are providing development opportunities (79% in 2011 and 70% in 2019) which is likely to limit individuals’ opportunities for progression.
▪ Throughout the past decade, trade union membership remained relatively steady in Scotland (29% of employees in Scotland were members of a trade union in 2011 and 2019).
▪ One in 8 workers in Scotland are overemployed, which is relatively high compared to other parts of the UK.
Those with the lowest qualifications, young people, women, and disabled people are most likely to be on low pay.
▪ The proportion of employees on low pay falls as qualification level increases, with less than 1 in 20 (4%) of employees with a higher degree on low pay.
▪ Young people (16 to 24 year olds) are most likely to be underemployed (wanting to work more hours for the same rate of pay), although underemployment among this age group has fallen over the last five years.
▪ Women are more likely to be on low pay and underemployed. This, in part, reflects the higher proportion of women who work part-time. They are also more likely to work in sectors which have higher rates of low pay.
▪ Disabled people (23%) and women with dependent children (38%) are more likely to be living in relative poverty than the Scottish average.
Child poverty is higher in urban areas with low pay and underemployment being higher in some cities, such as Glasgow, and parts of the Highlands and Islands.
▪ Relative child poverty has risen in nearly every Scottish local authority and English constituency since 2014/15. Children are generally more likely to be in poverty in urban areas.
▪ While cities like Glasgow have a relatively low proportion of low paid jobs, many of their residents are on low pay. This indicates that many of the higher paid jobs located in the city are likely to be done by in-commuters. Residents in parts of the Highlands and Islands are more likely to be underemployed than other parts of Scotland, and there are fewer high paid jobs in these areas.
Global economic change, an ageing population, automation and digitalisation are likely to impact the quality of employment and access to ‘good jobs’, with occupational polarisation set to increase, especially for women.
▪ Global economic change and ageing populations are reshaping the labour market, impacting on the quality of jobs and access to ‘good jobs’.
▪ The pandemic has accelerated trends in automation and digitalisation, impacting on how and where people work, and what jobs people do.
▪ Scotland’s ageing population will increase demand for health and social care services.
▪ The occupational profile of jobs in Scotland is projected to continue to polarise, with growth in high and low pay occupations, which can impact on opportunities for progression. Occupational polarisation is projected to be more pronounced for women.
Public procurement, voluntary charters and higher public sector pay were found to be the main levers available to the Scottish Government to support job quality, although there is a general lack of evidence on what works to support the creation of good jobs.
▪ The Scottish government embed Fair Work principles in public procurement processes. Procurement is one of the main levers available to Scottish Government, although no impact evaluations assessing the use of fair work criteria in procurement were identified.
▪ The Scottish Government has sought to encourage employers to commit to maintaining Fair Work standards through the Scottish Business Pledge accreditation scheme. There is a general lack of evidence on the impact of voluntary charters.
▪ The Scottish Government has demonstrated leadership by embedding Fair Work principles across the public sector and requiring all public sector employees in Scotland to be paid the Real Living Wage. Linked to this, there is some evidence that higher public sector pay increases the level of good quality jobs in the private sector.
▪ Career ladders, occupational skills training in targeted sectors, gender pay gap reporting, self-employment assistance programmes and employee ownership models were found to support individuals into good quality jobs or improve job quality.
Policy implications
There are several areas where the Scottish Government should prioritise action and investment to support the creation of more ‘good jobs’ and help people to access them. This report has identified that the Scottish Government should:
1. Continue to use purchasing power and leadership to promote fair work and seek to understand its impact. This could include adopting a sector-specific approach to the Fair Work action plan and measures to create good jobs.
2. Consider expanding its existing commitment to collective bargaining, set out in the Fair Work Plan, to sectors characterised by low pay and poor job quality.
3. Invest in in rapid testing and evaluation of initiatives and policies aimed at promoting the creation of good jobs, including robust monitoring and rapid testing and evaluation of the Fair Work First policy and its impact
4. Establish a cross-government approach to supporting the creation of good jobs, including by embedding fair work principles further across all policy areas, such as City Region and Growth Deal Plans.
5. Work with partners and use a wide range of channels to actively engage with employers to ensure flexible work arrangements are embedded into current work practices and to encourage the creation of new fair flexible jobs.
6. Support groups at risk of poverty to access good jobs through infrastructure development and welfare support by expanding its investment in free childcare, promoting greater transport integration and investing in direct welfare support, such as the Scottish Child Payment.
7. Work with employers to promote employee engagement, empowerment, and skills development to improve job quality, including by deploying and testing innovative approaches to pilot skills development initiatives.

Chosen excerpts by Job Market Monitor. Read the whole story @  Good jobs in Scotland – Learning and Work Institute