The overwhelming majority of London businesses say that their workers are directly affected by poverty, new research reveals today.
The Social Market Foundation think-tank found that 76% of London businesses think that at least some of their employees have direct experience of poverty.
In an SMF survey of 500 employers, a quarter of firms said poverty is demoralising the whole workforce across the capital and a similar proportion said poverty undermines staff wellbeing and mental health.
The think-tank’s survey also found that many businesses say they are ready to do more to tackle poverty, though the SMF said firms don’t always know the best way to act on poverty in their workforce, supply chains and community.
The SMF/Opinium survey of London business is part of a major project the think-tank is undertaking with Trust for London, a grant-giving trust, to develop practical ways for business to act on poverty.
The figures come amid growing interest among consumers, business leaders and investors in the social and environmental responsibilities of companies.
While many companies have developed plans to address their carbon emissions and other environmental impacts, fewer have plans and policies to address poverty among workers, suppliers and the communities where they operate.
The latest London Poverty Profile shows poverty has been rising the capital over the last decade, with concerns growing about in-work poverty.
The poverty rate for people living in London in households where both adults worked full-time grew from 6% in 2010 to 9% in 2020. 76% of London children that lived in poverty were in working families last year – up from 68% five years previously.
Over half of businesses surveyed by the SMF said that in-work poverty was a “major concern” for them.
The survey also revealed widespread willingness to act on poverty.
70% of businesses said that they were willing to take additional voluntary action beyond what is legally required of them to address poverty.
While some firms said they wanted to address poverty to improve their reputation or to improve staff morale and performance, many – 47% – said they simply feel that this is “the right thing to do”.
Interventions including the creation of the London Living Wage have been introduced in recent years to encourage businesses to go beyond their legal obligations to help boost living standards in the capital.
But the SMF said that poverty is about more than just wages, encouraging businesses to consider issues such as improving employing wellbeing and providing opportunities to gain a stake in the company, as well as action in the community and their supply chains.
The survey findings represent an opportunity for business leaders, politicians and campaign groups to help develop new standards of conduct for companies over poverty, the SMF said.
Such positive “social norms” have seen companies taking action over issues such as global warming and mental health – addressing poverty should be the subject of another such shift in culture, the think-tank said.
Richard Hyde, Senior Researcher at the Social Market Foundation, said:
“It’s remarkable that in one of the richest cities in the world, the vast majority of businesses say that poverty directly affects their workers. That’s a sign of how serious an issue poverty is in the capital.
“Businesses are clear: poverty is affecting their workers and supply chains, and the communities they do business in. This is holding back both the economy and the creation of a healthier, happier and more cohesive society.
“Business can be a powerful force for change, so it’s good that so many businesses are facing up to the reality of poverty in London, and that many of them say they are willing to take action.
“What’s needed now is a fundamental cultural change to turn those good intentions into concrete action. In recent years, we’ve seen more and more companies accept the need to take action on issues such as climate change and mental health. Addressing poverty needs to become part of the new normal for business.”