How fair is Brown’s recovery?

In his speech on the economy yesterday the Prime Minister underlined the need for a fair economy, with growth that will ‘preserve and expand the jobs – and lift the standards of life – of the British people.’

But a fair economy is not simply about restoring growth. Brown’s progressive goals are dependent on how the rewards of growth are distributed. Several high profile reports have recently revealed that strong growth in the decade before the financial crisis failed to address the acute inequality – geographic, social and economic – embedded in British society.

So, after the bust, how will Brown’s recovery fare on fairness?

Efforts to tackle inequality have typically focused on reducing poverty – a noble aim, but it offers limited mileage without parallel endeavours to redistribute the vast wealth at the top. Brown is therefore right to limit top earners with wage freezes for senior public sector workers – a measure first advocated by the Conservative Party.

But while the public sector may hope to set an example, Brown remains silent on wage inequality in the private sector – an indication, perhaps, of the persistent belief that high wages drive entrepreneurialism.

Over a fifth of UK workers are low paid – and millions more are stuck in poor quality, insecure jobs. The rewards of the boom years passed these workers by. The rise of the knowledge economy led to new highly skilled and highly paid jobs, while the low skilled sector consisted increasingly of poor quality jobs in the service economy. Social mobility has remained stagnant for decades, partly as a consequence of this polarisation between lovely and lousy jobs.

Yet the strategy announced yesterday does not rise to this challenge. It reiterates promises from January’s growth strategy to invest in high quality infrastructure and scientific innovation. These measures may well create jobs of the future, and high skill industries will surely secure UK growth and a strong position in global trade. But the Government has offered no policies to improve the quality of employment at the bottom or tackle the low pay that persists in many industries.

Tess Lanning, Researcher, ippr