Business and inequality

Bristol is widely lauded for its highly skilled workforce, quality of life, strong transport links and incubation of creative, high-growth industries such as cloud technology, video production and robotics. We’ve got above average pay for people working in the city and four in ten employees have a degree. So far, so rosy. 

But more recently the darker side of the city’s economy has come to the fore, nominally just how uneven the spread of that wealth is. The new Temple Quarter, a flashy flagship of corporate industry, stands just metres away from the ward of Lawrence Hill, one of the city’s poorest where a third of people are income deprived. 42 areas of the city are ranked among the most deprived 10 per cent in England. A hefty 20 per cent of people in the city earn less than the living wage. Bristol’s riches are unevenly spread and critics say that the stark inequalities can no longer be ignored.

In his first State of the City lecture in October, Marvin Rees, flanked by two prominent academics, warned that huge inequality combined with low productivity and poor infrastructure is holding Bristol’s economy back. 

“For all intents and purposes, we are a thriving city – the West of England is the UK’s most economically productive region.  Our challenge is that while we have a great story to tell, this prosperity is shared by too few people.  We are a city in which inequality is growing and life is increasingly unaffordable.  This is unacceptable. Not only is inequality a social injustice but it is an economic liability that undermines the strength of our democracy and society.

“The evidence tells us that it is not possible to build strong societies, healthy democracies and resilient economies across great wealth gaps. We end up spending public money of the social consequences of weaker societies.”

“It is a city of deep inequalities,” agrees Gavin Kelly, CEO of the Resolution Trust, who examined the statistics to form a picture of the city’s fortunes.

“If we look at child poverty across the city we find a gigantic poverty gap with 5 per cent of children in poverty in some wards and just under half in others. That’s a far more pronounced difference between affluent and deprived communities within a city than we see in places like Glasgow or Nottingham.” 

Productivity has slipped back to 93 per cent of the UK average since the financial crash, “resembling places like Darlington or North Lincolnshire. That’s an odd combination.”

Mary Rivers of Equality Bristol says that translates into strangulated growth and unhealthy industry: “Major economic thinkers, such as Piketty, Stiglitz, Krugman and Atkinson, now consider that economic inequality results in the wrong sort of growth, with high volatility, sluggish middle and lower incomes, and increased personal debt,” she explains.

“Economic inequality has an impact on every individual and every business in Bristol and is harming the local economy and the health and wellbeing of all of us.”

So what could and should business do about it?

“Businesses have always had a responsibility, and many great companies have taken that responsibility seriously,” says Marvin; “but this can no longer be the preserve of those few enlightened businesses.”

James Durie, CEO of the Initiative and Bristol Chamber of Commerce at Business West, says the business community “wants and needs to be directly engaged in how we address inequality. Simply put, it’s bad for business and more importantly bad for people.”

It forms part of the organisation’s raison d’etre established by government initiatives to ensure business takes a deeper, longer-term interest in how places are shaped. While Business West has a raft of initiatives in place to help mitigate inequality, they say there are steps businesses can take too.

“A good place to start with internal practices is to implement an equality and diversity policy,” James advises; “this shows commitment from the business to address this issue and recognise the importance of a more diverse employee base.”

He adds that engaging with the chambers of commerce can connect organisations with the breadth of the business community.

“Many of the big problems can’t be solved by business alone,” says Mary; “but our business leaders need to reflect on whether Bristol is attracting the right sort of business to the area; what the skills gaps are and how to fill them; and how to create long term well paid job opportunities.

“[And] there are some immediate steps we can all take: Make sure you pay the Living Wage, pay your top earner no more than ten times the rate of your lowest paid employee, stamp out zero hours’ contracts and insecure self-employment, check your supply chain to check that you are creating good, well-paid jobs as part of your procurement process, respect workers’ rights, and empower your workforce by making them an integral part of the organisation with the formation of a Community Interest Company or Coop.”

“There is increasing momentum to understand that wealth creation and social value need to work together,” James concludes, “not one at the cost to the other.”

Read more: Why is Bristol so successful?