Decent Work – do we need more carrot and stick in Scotland?

From our work around the world, it is clear that jobs are a critical driver of development in the world’s poorest countries. However, with one in four global workers earning less than $2 a day, we’re still a long way from meeting the Sustainable Development Goal of ‘decent work for all‘.

Poor quality work is also a key factor driving poverty in the UK. Here, in Scotland, 70% of children and 64% of adults in poverty now live in working households.

Graph of poverty in Scotland levels

Our decent work research highlighted the human impact of low-paid and insecure work, particularly for women who are still more likely to be in low-paid, insecure and undervalued work, whilst also facing particular barriers to entering the labour market.

Right now, we are supporting marginalised women through supported volunteer placements in Oxfam shops, including those in Glasgow. For these women – who are mainly unemployed – work should provide one route out of poverty, but that’s far from guaranteed.

Encouragingly, there seems to be a political consensus in Scotland and across the UK that we need to improve the quality of work available. However, faster progress is needed. Fully addressing this problem will clearly require action at a UK level- including through improved employment legislation and greater workers’ rights. But while devolved powers are limited in this area, action can also be taken at a Scottish level.

To date, the Scottish Government’s efforts include their inclusive growth agenda and the creation of the Fair Work Convention. While welcome, the Government’s activities have largely adopted a voluntary approach, including via the Scottish Business Pledge.

The Pledge is a commitment by companies to adopt fair and progressive business practices, including paying the Living Wage and not using zero hour contracts, as part of a ‘pick ‘n’ mix’ array of nine key components, including innovation and taking advantage of international business opportunities.

So far, more than 400 companies have signed up, although it is estimated that less than 4% of jobs in Scotland are employed by accredited firms. The number of signatories also falls significantly short of the Scottish Living Wage Campaign which has reached more than 1,000 accredited employers.

While there is something to be said for voluntary approaches which encourage and cajole businesses to offer better quality work, there are also inherent limitations which mean they cannot be relied on in isolation to tackle long-term structural issues within the labour market.

Oxfam research looking at the lessons from voluntary employment charters across the UK, has found that they require close partnership working; dedicated resource to track outcomes and monitor compliance; and both long-term commitment and targets. Crucially, they also need strong incentives for businesses to engage. This either means the creation and promotion of a strong brand which allows employers
to mark themselves out or harder incentives which provide preferential access to Government procurement or funding.

Amid a recognition that the Business Pledge doesn’t currently have the coverage or momentum it could and a formal evaluation planned by the Scottish Government, there are, perhaps, two options to make it more impactful.

The carrot: The Scottish Government could continue to maintain a voluntary approach, but invest in enhanced promotion and partnership to increase awareness of the Business Pledge brand, creating a greater incentive for businesses to sign up.

This could involve outsourcing aspects of the Pledge to civil society groups in a similar approach to that adopted for the Living Wage Campaign. As well as leveraging in partners, this could help build greater transparency in the Pledge’s somewhat opaque accreditation process.  

However, in evaluating the Pledge, the Scottish Government should also consult on gaps within the Pledge itself with concerns that the gender balance element is ‘meaningless‘ and the lack of any reference to paying appropriate levels of tax. Such gaps would also need to be plugged.

An enhanced approach of this type would require resourcing from Government budgets but, while it might lead to more employers signing up, it’s impact in driving change among employers that don’t currently provide decent employment conditions might still be limited.

The stick: Another option is to revisit the original concept. When the Business Pledge was first announced in the Programme for Government 2014-15, the Scottish Government said it would set out “what is expected of businesses in return for receiving support from the Scottish Government and its agencies”.

Since that announcement, the Business Pledge has become an entirely voluntary scheme. The Scottish Government could revisit this approach and consider how accreditation could be compulsory for those businesses seeking access to public procurement and enterprise agency funding.

Such an approach would chime with the Economy, Jobs and Fair Work Committee’s recommendation in its recent Gender Pay Gap report that “recipients of Regional Selective Assistance grants should be Business Pledge signatories”.

Using devolved powers to their maximum to increase the number of employers and, critically, the number of employees covered by decent employment conditions, should be a key priority of Government. However, making significant inroads towards ensuring ‘decent work for all’ in Scotland is likely to require more stick as well as the carrot.