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More jobs, better jobs, needed to tackle poverty in cities

London-140-pixelsGood jobs – and plenty of them – are the most important factor in reducing poverty in the UK’s cities, according to a new report released today co-authored by LSE academics.

The Joseph Rowntree Foundation report on Cities, Growth and Poverty shows that the quality and quantity of jobs is the most important factor linking economic growth and poverty.

Dr Neil Lee from LSE’s Department of Geography and Environment led the study, along with LSE colleague Professor Andrés Rodríguez-Pose and researchers from The Work Foundation, Coventry University and the University of Warwick.

The report looked at the 60 largest cities in the UK in the period between 2000 and 2010 and how employment and output growth impacted on poverty.

Significant increases in economic disparities between British cities were found in this period, with London and surrounding cities experiencing more rapid growth than elsewhere.

NLee-140pixels“Yet this economic growth did not always reduce poverty,” Dr Lee said.

“London accounted for 37 per cent of the country’s growth in economic output in the past decade, but poverty levels remained stable and even increased in some parts of the capital.”

Other key findings of the report are:

  • There is no guarantee that economic growth will reduce poverty: some economically-expanding cities experienced unchanged or increasing poverty rates;
  • Employment growth has the greatest impact on poverty, but it is context dependent: If jobs are low-paid and lack opportunities for progression, the impact on poverty is minimal;
  • Growth in output is important for economic success, but it can worsen poverty because it can lead to increases in the cost of living;
  • Some cities are tackling this challenge by promoting employment in expanding sectors or providing training targeted at disadvantaged groups to enable them to access opportunities associated with major infrastructure projects

“Cities are increasingly seen as the driver of economic growth, yet cities are also where much of the poverty is located, suggesting that the benefits of growth are not shared by everyone in society,” Dr Lee said.

The researchers found that progression within the workplace was one of the key routes out of poverty, particularly for people in low-paid, low-skilled work.

The authors identified examples where individual cities could successfully tackle poverty, combining the resources of local government, employer-led training programmes and the promotion of a living wage.

The full report is available at: www.jrf.org.uk

For more details, contact:

Dr Neil Lee at n.d.lee@lse.ac.uk, 020 7107 5477; Professor Andrés Rodríguez-Pose at A.Rodriguez-Pose@lse.ac.uk, 020 7955 7971 or Candy Gibson, LSE Press Office at c.gibson@lse.ac.uk or 0207 955 7440.

Notes to editors

1. Dr Neil Lee is an Assistant Professor in Economic Geography at LSE. His research focuses on cities and the social dimensions of economic change - including everything from the economics of the creative industries, the impact of cultural diversity on innovation, and the link between innovation and inequality.

2. Professor Andrés Rodríguez-Pose is a Professor of Economic Geography at LSE, where he was previously Head of the Department of Geography and Environment. He is the current holder of a European Research Council (ERC) Advanced Grant.

3. People are counted as being in poverty if their household income is below 60 per cent of the median income for all UK households. In 2011/12, this poverty threshold for a single adult was £128 and for a couple with two children it was £357.

4. JRF is a funder of research for social change in the United Kingdom. It aims to reduce poverty and strengthen communities for all generations. For more information visit www.jrf.org.uk

7 February 2014