When it comes to economic wellbeing, local policy needs to focus on feelings as well as facts.
As governing politicians will ruefully confirm, there is often a yawning gap between perceptions and reality. People tend, for example, to exaggerate crime rates and underestimate average sentences. To the frustration of Whitehall, the public often rate national services badly even when they report good local experiences.
Before bemoaning the baleful combination of ignorance and media negativity, it’s worth asking whether people’s feelings matter even when they don’t map on neatly to the facts. This is surely the case when it comes to economic insecurity.
Theresa May’s use of the phrase ‘just about managing’ reflected an awareness that the ranks of those who feel insecure stretches way beyond those who would typically be described as poor; indeed it includes many households with above average incomes. Surveys indicate a rise in the experience of insecurity coupled with pessimism about the fortunes of future generations. But it is not only a feeling; it has tangible results. A growing body of research shows that a lack of perceived security has malign impacts in areas ranging from health to productivity. Despite all the hype about the impact of automation, job tenure in the UK has actually marginally increased in recent years. A likely explanation is that people would rather hold on to an unsatisfactory job than risk a leap into something new: two thirds of UK employees work in organisations with below-average productivity and, more than in other counties, workers here report that their skills are not utilised.
In research just undertaken by the RSA and Nottingham Trent University’s Civic Exchange, economic insecurity is distinguished from traditional measures of deprivation by five characteristics. It is both objective and subjective; neither income level nor work status are sufficient proxies for people’s perception of insecurity. It is more a household than an individual phenomenon; being a zero-hours worker will generate less insecurity to someone who is the family’s second earner. It relates to the experience of work not just the risk of unemployment; many people’s biggest worry is about a loss of status and control in their current job. It is dynamic and multi-faceted, involving, for example, a combination of past experience, present conditions and future anticipation. Finally, it is influenced by ‘buffers’, such as asset ownership and skills, and ‘stressors’, such as price inflation and cuts in local services.
Local authorities that chose to focus on insecurity would be showing that they care not just about data but about how people feel and its consequence. But what difference could it make to the way councils go about policy making?
It would mean having a more strategic and systemic lens. While, at least in the short term, income levels track changes in wages, taxes and benefits, insecurity reflects a combination of economic, societal, subjective and place-based factors. People who feel their skills are not being used or may soon become obsolete will rightly worry more about the risk of losing their job. But one of the vicious cycles created by insecurity is to encourage people to hunker down at the very points in life when looking to new opportunities is most vital.
Equally, a focus on insecurity encourages a more preventative approach, informed by an awareness of the buffers and stressors mentioned above. For example, having no savings or anyone to turn to in a household financial crisis may not present as a problem when things are going OK, but people are right to feel they are highly vulnerable. Many public services were originally designed to provide security, yet they rarely identify and reach out to people at critical moments such as losing a job, experiencing family breakup or the birth of a new child.
Our national survey work and the local analysis undertaken by Nottingham Civic Exchange reveals a fascinating and concerning picture of a population with high levels of insecurity and low levels of optimism. This data is not only a guide for new policy making. While national policy can create the conditions for people to achieve greater security, a fuller awareness of insecurity and its causes and consequences can help families and wider communities to make wise choices and encourage businesses and civic groups to explore their responsibilities too.
An important part of the reality perception gap is the way issues are framed. The RSA believes that reducing economic insecurity could be a frame that brings a wide cross section of people together, not just to reassess policy and investment priorities today but also reform public services so that we are more resilient tomorrow.
Matthew Taylor, chief executive, the RSA