past, present and the future of living standards in the sheffield city region

Forging ahead or falling behind?Past, present and the future of living standards in the Sheffield

City RegionCraig Berry, Deputy Director at SPERI

Dan Jarvis, MP for Barnsley CentralJulie A Kenny CBE DL, Entrepreneur

Emma Stone, Director of Policy and Research at Joseph Rowntree Foundation Stephen Clarke, Research and Policy Analyst at the

Resolution FoundationTorsten Bell, Director of the Resolution Foundation

@resfoundation // #MetroMayor

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Forging ahead or falling behind?

Past, present and the future of living standards in the Sheffield City Region

Stephen Clarke

January 2017

@stephenlclarke / @resfoundation

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A disclaimer

In this research we have included in the Sheffield City Region the original four areas:• Barnsley• Doncaster• Rotherham• SheffieldAnd• Bassetlaw• Chesterfield

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THE PAST

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Industrial upheaval had a big impact upon the region, but by the early 1990s employment rate was similar to those in other cities

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The 2000s was a period of strong economic growth

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Growth was powered by service industries in particular

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Growth was powered by service industries in particular

Health, social work,

construction and education

were all big contributors to

economic growth during

the period

Manufacturing shrank, but less

so than the in the rest of the

country

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THE PRESENT

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Sheffield’s recovery from the crisis has been sluggish

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People are in work, but pay is low

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The typical worker in the region takes home £43 less a week than a typical employee in the UK. A pay gap that is present in most parts of the region

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THE PAY GAP1. WHO WORKS AND WHERE

THEY WORK2. HOW THEY WORK

(PRODUCTIVITY)

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The pay gap is partly because the region has relatively more firms that tend to pay low – dragging down overall pay

Manufacturing is a big

employer in the region. 1.6%

more people are employed in

the sector compared to

other city regions

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The pay gap is partly because the region has relatively more firms that tend to pay low – dragging down overall pay

Hourly pay in manufacturing in the region is

about £2 lower than the pay of the average UK

worker

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It is also because the region has more workers with lower education levels, who tend to be paid less

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Productivity explains the other half of the pay gap

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Productivity is lower in most sectors

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Productivity is lower in most sectors

The majority of sectors

contribute to the region’s productivity deficit, but

particularly the large sectors of

retail, manufacturing

and office admin

Only in education is productivity significantly

higher

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Low pay acts as a drag on household incomes, although employment and low housing costs offset this

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Although as with pay, household incomes vary across the region

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THE FUTURE?

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The NLW will reduce the number of low paid workers in the region

‘Low paid’ refers to

anyone paid below two-

thirds of the median wage

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But will bring with it new challenges – particularly the need to help workers progress off the wage floor

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In some sectors nearly 7 in 10 workers may be paid the legal minimum by 2020

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MISSING OUT ON THE NORTHERN POWERHOUSE?

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The region needs to get devolution back on track and take steps to raise pay

Priority 1: The form, powers and geography of devolution is a local decision, but opportunity should not be missed.Priority 2: Set up Sheffield Low Pay Commission to tackle low pay in the retail and leisure sectors in particular.Priority 3: Build on existing strengths, particularly growing student population

Forging ahead or falling behind?Past, present and the future of living standards in the Sheffield

City RegionCraig Berry, Deputy Director at SPERI

Dan Jarvis, MP for Barnsley CentralJulie A Kenny CBE DL, Entrepreneur

Emma Stone, Director of Policy and Research at Joseph Rowntree Foundation Stephen Clarke, Research and Policy Analyst at the

Resolution FoundationTorsten Bell, Director of the Resolution Foundation

@resfoundation // #MetroMayor