One in four children in Scotland – around a quarter of a million – live in poverty.
And if you were born a skint, chances are you will live a skint and die a skint. Poor children do less well in school, have poorer health, are more likely to become homeless and die younger. It’s called the “poverty trap” for a reason.
I am not in the best position to debate the extent to which social mobility came to a halt, when it happened, and who was at fault. But I understand the world of work and I see that the business world has something to contribute to break the current cycle.
So, as we digest the Scottish Government’s latest child poverty plan, released last week, what can and should we do?
Well, the first thing is to play to our strengths. We know the biggest risk factor for child poverty is living in a household without work – and that’s exactly where around 80,000 children live in Scotland today. We also know that businesses are good at creating jobs – and small businesses have a particularly strong track record of creating jobs for those furthest from the labor market.
So, at a time when the labor market has hardly been tighter and hiring staff is difficult, we must work to remove the barriers that prevent the unemployed – and the much larger group who are economically inactive due to poor health or family responsibilities. – seize job opportunities.
It’s hugely impressive to see the creative ways employers are adapting their work models and broader offerings to attract more candidates. But there are limits to what is practical – certain roles will always need certain people in certain places at certain times.
We must therefore also consider eliminating the obstacles that daily life puts in the way of a potential employee.
If, for example, you have school-age kids and your job is an hour away by public transit, how many hours can you actually work between dropping them off in the morning and picking them up at 3 a.m.? How many more hours could you get in if there was proper child care that truly reflected what a busy day at work was like for a parent?
And, while we’re at it, why do so many people have to travel long distances to get to work? Why can’t we bring more jobs to where people already are? Over the past decade, we have seen major public and private sector employers leave their downtown sites. If we’re serious about local economic regeneration – and the idea of ’20-minute neighborhoods’, where everything you need for everyday life is just steps from your front door – this is a trend that we must reverse.
At the same time, we cannot ignore the fact that in addition to the 80,000 children in households without work, there are more who live in relative poverty in a household where someone works.
So, in addition to removing practical barriers to help parents work longer hours, what can be done about their hourly rate?
Now, before we go any further, let’s make it clear that this is by no means just a private sector problem – and certainly not a small business one. There are just under 2,500 accredited Living Wage employers in Scotland, two-thirds of which are in the private sector. And, of those two-thirds, more than 80% are small businesses.
But the reality is that the overhead spiral leaves very little room for small employers, especially in some sectors, to raise wages unless they can cut costs elsewhere or raise prices.
A bright spot on this front, however, is the increase in Employment Allowance – essentially a tax threshold on employers’ National Insurance contributions – from £4,000 to £5,000, unveiled by the Chancellor in its spring statement last week. It’s something the FSB has been pushing for for months and will help small employers find some breathing room.
Tackling child poverty seems like a daunting task, because that’s exactly what it’s all about. But that does not make the task insurmountable. We can all help break down the practical barriers that keep people from working and families from the life they deserve.
Colin Borland is Director of Decentralized Nations for the Federation of Small Businesses