How To Create Millions of Good Jobs

We'll need them to win the next election

There are not enough good jobs and that is why voters are leaving us for radical alternatives. In our post-industrial era, a good job that pays enough to live on is only available to some people working in some places. The economy, undirected and uninitiated by the government, will never create enough good jobs and it definitely won’t create them in the places that need them. If we want people to earn a decent living wherever they live, then government must help to create good jobs: through the green transition, physical & social infrastructure, and in direct employment programs.

A good job is one that pays enough to live on. According to the Joseph Rowntree Foundation (and I will keep banging this drum until this is drilled into your head), a couple with two children need to earn around £35,000 each to live. In the UK, around 40% of full-time workers, or 10 million, people earn earn less than £35,000. A single person with no children needs about £30,000 for a decent life, but around a third of full-time workers, or 7.5 million people, less earn than this. In short, we need to create millions of good jobs for people to earn a decent living.

The good jobs shortage

There are not enough good jobs anywhere and in large parts of the country, more than half of workers don’t have good jobs.

Firstly, we have a shortage of good jobs everywhere, including in more prosperous places. Living in an area, such as London, with lots of high-paying jobs does not help low-paid workers earn more. Low-pay workers get paid the same wages everywhere in the country because the minimum wage sets an earnings floor. A low-paid barista does the same job for very similar pay in the City of London (average wage £77,000, barista salary £12.83 per hour) as they do on the Blackpool seafront (average wage £29,000, barista salary £11.96 per hour).

When we say a region like London, is more prosperous, what that actually means is that high- and middle-pay workers get paid more in that region, not that everyone does. On top of that, a high concentration of well-paid people pushes up rent and costs in the region, meaning the minimum wage barista in the City will have a worse standard of living than the one in Blackpool. Low pay jobs pay the same low wages everywhere, it is high wage jobs that differ. If we want to help people get good jobs, we need to create them in every part of the country.

The lowest-paid earn about the same, regardless of where they live

Source: Annual Survey of Hours and Earnings

Secondly, over 80% of local areas have a severe shortage of good jobs. Outside of London and its commuter belt, median wages are less than £35,000. This means over half of people earn less than £35,000 needed for a decent life. Even some our most dynamic cities, Sheffield, Leeds, Bristol, do not have enough good jobs.

And areas with low average wages also have fewer jobs overall. We have close to full employment nationally, but that is not the same as having full employment in every part of the country. Instead, we have towns like Middlesborough, that has an employment rate of 66%, and Guildford, that has an employment rate of 88%, compared to 75% nationally.

To give everyone a decent life, we need to create millions of good jobs across the country and create more of them in areas that have both fewer good jobs and fewer jobs overall. That is the challenge we face.

How we can (and can’t) create good jobs

There is no silver bullet for creating the millions of good jobs we need. To create millions of good jobs, we need to make a combination of labour-intensive investments. Investing in the green transition, social, and physical infrastructure that we need. And for those that struggle to find work, we need a direct employment program to help them get into the job market.

Firstly, we can create a lot of good jobs in the green transition. If we get the green transition right, we will create around 1.5 million jobs. The green transition could generate around 700,000 jobs directly (in net terms) and another 700,000 jobs indirectly in the supply chain (e.g. when we build a wind farm, we also create jobs in the design and engineering sector to) and elsewhere in the local economy (e.g. builders spend their money in local shops). That’s around 1.4 million jobs and, of those necessary for the green transition, around 70% are non-graduate jobs with a large number in the construction sector. Construction jobs are good non-graduate jobs, paying £35,000 a year.

The green transition is, however, limited in where it will create good jobs. The green transition requires the physical transformation of our world. Physical transformation, whether that means building wind turbines or building electrical vehicles, requires physical space. That physical space is, obviously, far cheaper outside major urban areas. That means most of the jobs created in the green transition will be located outside of London and other major cities. We aren’t about to build a wind farm in Walthamstow or a car factory in Camberwell.

The second route for creating good jobs by investing in the physical infrastructure - the housing, rail, and bridges – that are needed. To build the 1.5 million homes we need, for example, will require about 250,000 more (good) construction jobs with another 250,000 jobs created elsewhere as a result of the investment. There will be more jobs created in the other physical infrastructure that we need.

Thirdly, investing in our social infrastructure - our healthcare, childcare, and education - can also help to create good jobs. There are 31,000 nursing vacancies and 40,000 early years education vacancies at the moment. Local government has lost around 300,000 jobs since 2010 (excluding academisation). As needs are greater in more deprived areas, these social infrastructure jobs will be automatically created in areas where employment is already lower, and especially within major urban areas. In particular, these areas where

Finally, we need jobs for those who find it hard to get them. For them, the government should become the employer of last resort and create a programme of direct job creation like New Labour did, and the last government abolished. The idea is simple: for those that can’t get a job, provide direct employment through the state alongside training. The government should also provide employment subsidies for those who leave the program and go to the private sector. This would require investment from the government, but the long-term benefits are considerable. The last Labour government’s ‘New Deal’ led to a 20% increase in the likelihood that young, unemployed men could get into work, and the costs to the government were found to be far outweighed by the social benefits¹.

Now, let’s cover what will not work: crossing our fingers and hoping that leaving the economy to its own devices will create the good jobs we need in the places that need them. This has been the playbook for over a decade and it hasn’t worked because the structure of our economy changed after deindustrialisation. Today, the highest paying and most productive work is in high-skilled, graduate service jobs — software, finance, biotech — rather than manufacturing or mining. A software consultancy needs teams of high-paid graduates working together. It needs to go where the skilled graduates are. Capital chases skills.

Good jobs are naturally created in major cities where high-skilled workers already are. This then attracts more investment, as businesses move to take advantage of skilled workers. These workers become more productive by working with one another, attracting further investment, resulting, in turn, in higher productivity. The cycle becomes self-reinforcing, and an area with more good jobs sucks in economic activity from elsewhere. Without direction, good jobs will be created in already more productive areas. This is why only six areas outside of London & the South East have a decent median wage. This is why the government needs to step in.

Creating good jobs helps us beat Reform

Creating good jobs is something we value inherently. Ensuring people can live a decent life and bring up a family is essential to our Labour values. But creating good jobs is also central to us winning re-election. It is voters without good jobs who are leaving Labour, both in the short and longer-term. I’ve previously written about how economically insecure voters have been the ones leaving since the 2024 election for both Reform and the Greens.

But this is a long-term problem too. Labour’s support amongst non-graduates, who tend to earn a lower wage and live outside of the South-East, is now significantly lower than our support amongst graduates. And these voters have increasingly left for radical or populist alternatives that promise to overturn the system. This is what lost us the Red Wall. What used to be a core part of our Labour’s base left us for UKIP in 2015, voted Brexit in 2016, went Conservative in 2019, and now are far more likely to vote Reform. This pattern – of non-graduates leaving centre-left parties for populist alternatives – is present across all high-income nations. The only way to win them back is to show that we can make them better off. We can do that by creating the good jobs they need

Source: Social Market Foundation

Conclusion

We have a good jobs shortage. Millions can’t earn enough to afford a decent life and they are leaving us to vote for other, radical parties. This is true in every part of the country, and especially outside of London & the South East. Leaving good job creation to the free market alone has failed because the structure of our economy has changed. To create the good jobs we need for the people and places that need them, the government needs to step in, by investing in the green transition, physical infrastructure, and social infrastructure, as well as repeating the successes of the last Labour government through direct employment. This is how we give people the decent life they work so hard for. This is how we win the next election.

1. The more eagle-eyed of you will notice that we are talking about creating a couple of million (good) jobs above. If we count up the amount that will be created in the green transition (1.5 million), construction (500,000), and public sector employment (370,000 directly created) then we are looking at around 2.5 million jobs being created. We also need other cost of living interventions on bills, tax, and social security to make people be able to earn a good life.