Tackling poverty needs ‘radical action’, not more economic failure

Government action on poverty and inequality tinkers around the edges of our economy but success depends on more radical measures, writes Judith Robertson, head of Oxfam Scotland.

Poverty is a creation of society and – if we work together and have the will – we have ample resources to end it. But the first step on that journey needs to be a radical transformation of the economy so it provides prosperity for all, not just a few.

The numbers speak for themselves (…) Scotland’s wealthiest 10% of households are 273 times richer than Scotland’s poorest households.

Today, Oxfam Scotland is publishing Our Economy – a set of concrete demands that will help us along the road to the fulfillment of that vision.

In the process of creating the report we talked to our partners throughout Scotland – inspiring organisations (such as Sunny Govan Community Radio, pictured) which work for positive change in their communities, and organised a series of seminars in conjunction with the University of the West of Scotland, bringing
our partners together with academics and experts. We didn’t simply look to statistics. We explored the realities of people’s lives.

The first challenge within Our Economy is for politicians, policy-makers and businesses to finally acknowledge that the benefits of economic growth do not mysteriously trickle down to all of us.

It pools at the top so that a tiny minority enjoy a bounty of riches, while – as we recently highlighted with Church Action on Poverty – over half a million people now rely on food aid.

The numbers speak for themselves:

Scotland’s wealthiest 10% of households are 273 times richer than Scotland’s poorest households. The average pay of a FTSE 100 CEO is now £4.8 million – an incredible 185 times the average salary.

Our report quotes the findings of the independent High Pay Commission [pdf]:

The dramatic growth of pay at the top has created an economic elite, which appears to ‘float free’ from the rest of society.

The reality for Scots who are on the wrong side of this gaping chasm is a cocktail of high mortality, economic inactivity, mental and physical ill-health, poor educational attainment, and exclusion from the decisions that affect them.

For decades, politicians and policy-makers have supported a myriad of anti-poverty programmes and regeneration initiatives. Millions have been spent on bricks and mortar projects in deprived areas. There have been projects to improve people’s health, to provide extra support for children in their early years, to give people new job skills, to improve their confidence.

These all have a place and are important. But they will only help people so far. If the economy fails to deliver on people’s basic right to work and to an income that allows them to properly provide for themselves and their families, then too often people will find themselves back on square one, looking with anger and despair at those who have been helped up the ladders of life.

We highlight numerous examples of how our existing economy has failed. For every full-time vacancy advertised in Jobcentre Plus in Scotland, there are eight claimants of Job Seeker’s Allowance. In West Dunbartonshire there are 40 claimants per vacancy.

No matter how ‘job ready’ someone is, no matter how much vocational training they are given, no matter how hard they look for work, that fundamental economic reality denies them the opportunity to work.

People’s bootstraps only stretch so far. It is time politicians and others stopped blaming them for their situation and concentrated their efforts on creating a new economy that actually meets their needs.

People’s bootstraps only stretch so far. It is time politicians and others stopped blaming them for their situation and concentrated their efforts on creating a new economy that actually meets their needs.

So what does Our Economy look like? Here are some of our ideas.

All public bodies should have a duty placed on them to lessen inequality and focus their help on those who are deprived, giving special regard to the place of women. Their performance in fulfilling that duty should be monitored by an independent Poverty Commissioner.

Employers in the public and private sector should pay a living wage. They should create workplaces that are inclusive, that allow the sharing of work and where massive gaps in salary between those at the top and those at the bottom are not tolerated. We should create a Scottish Ethical Business Initiative to encourage companies to take these issues seriously.

As the report says:

Businesses make the best contribution doing what they do best – not trying to replicate the state or civil society – but acting for the right reasons and from an enlightened perspective of sustainability.

Business that agree to work in this way, and which demonstrate a willingness to recognise their wider role in society, should be rewarded through the tax system. Businesses that carry on putting massive profits before people, or which pollute the environment, should be penalised. They should also be denied corporate welfare support like subsidies, grants or public contracts.

Shared ownership of businesses, through co-operatives and social enterprises, should be supported and encouraged, making it the structure of choice for new start-up companies.

Our report says:

The presence of cooperatives in local economies is associated with lower levels of inequality. Cooperatives give greater influence in economic transactions to individuals who – as employees, communities, consumers or producers – would otherwise be unable to exercise significant market power.

Scotland’s biggest asset is its people. So it is no surprise that some of the best ideas about challenging poverty and its root causes come from people in Scotland’s deprived communities. But too often their views and opinions are belittled and marginalised by those in power.

As one community activist told us: “The people in power don’t listen to the people facing the problems.” In Our Economy, that needs to change.

Underpinning all of this, we need a better way of measuring economic success. Robert Kennedy famously said of Gross Domestic Product that ‘it measures everything… except that which makes life worthwhile’.

We agree, which is why we created the Oxfam Humankind Index for Scotland, a new measure of our collective prosperity based on people’s real priorities. Government should build on that work and take it further.

Poverty is unjust and unacceptable. Our Economy shows that is also avoidable. Over the coming months and years we will work with others to build Our Economy, so that together we can end the scandal of poverty in rich, modern Scotland.

This blog was first published in the Guardian Scotland blog.

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Author: Judith Robertson
Archive blog. Originally posted on Oxfam Policy & Practice.