Economy

SEOUL (Reuters) – At age 69, Kim Jung-mi holds three jobs: she spends three hours getting a two-year old home from kindergarten every weekday for $9 per hour, then washes vegetables at a store that sells kimchi. Occasionally, she walks her neighbour’s dog. That kind of gig work among elderly people has helped South Korea to log a record-setting run of low unemployment through February, at 2.7%, with almost half of the job increases driven by people 60 and older.Although the drift to low-paid, part-time work is a global phenomenon, it has put South Korea at the top of OECD’s scale measuring the temporary employment rate for people 65 and older: 69% of that age group is working somewhere, far higher than 38.1% in Japan and 13.2% for the peer group average. The heavy concentration of job increases in the elderly population shows the fragile nature of the domestic economy, experts say.”I know I’m underpaid compared to some of younger people in the area, but where else would I go if I don’t take this opportunity?” Kim said, adding that she is happy with her current jobs after other roles such as being a cleaner.None of Kim’s jobs comes with any social security benefits or the potential for meaningful wage increases. Such jobs do little to boost the country’s private consumption, as many in Kim’s age group are working to barely escape poverty. It also highlights a consistent problem in Asia’s fourth-largest economy, where the United Nations estimates that the share of elderly people will become the largest of any country by 2050. The country’s elderly face the highest risk of becoming suicidal, and the relative poverty rate for 65-year-olds and above in Korea is the highest in the OECD. About 45% of that age group is living on less than 50% of the median disposable income.Wages are barely increasing. Nominal wage growth for South Korea’s salaried workers was 1.7% last year after a 0.3% gain in 2020, data from Statistics Korea shows. Yoon Jee-ho, a Citi economist based in Seoul, says the high poverty rate exposes structural weakness. “Korea’s people aged above 65 tend to have a higher income poverty rate compared to other major economies, partly due to insufficient coverage of the existing pension system as well as not enough private savings,” Yoon said.The demographic squeeze is not unique. In Japan, senior citizens have become an increasingly important part of the country’s labour pool, as about 13% of the workforce are 65 or older, up from 9% in 2012. More than three-quarters are part-timers filling roles such as cleaners, taxi drivers and shop clerks. James Cho, CEO of Korean mobile platform “Pleasehelp,” which connects job seekers to errand work, says many people on the cusp of retirement are just as busy as those who are in their 20s and 30s it terms of job searching.”There is no age boundary; as long as one can use a smart phone, the elderly can also make money,” Cho said, adding that there were all sorts of gigs, including catching cockroaches, staging a fight, and delivery orders. Conservative President-elect Yoon Suk-yeol, who promised to deliver stable, private sector-led job growth, is inheriting an economy that expanded at the fastest pace in 11 years in 2021, with minimum wage at 42% higher that of five years ago.The fast-rising proportion of the elderly population poses a growing threat to public finances, as more people need social welfare at a time when tax revenue is set to decline alongside a shrinking workforce. “Retirement? I’m not sure if I can ever do that; I will probably be working as long as I can,” Kim said. (The story corrects to say unemployment, not employment in headline) More

When the pandemic struck in 2020, entire industries were decimated overnight, leaving workers to survive on unemployment benefits. But for some, the Covid-19 crisis presented an opportunity to change course; indeed, the post-lockdown job market faces a shortage of workers even as it recovers.These are the stories of six people who transformed their careers during the past two years. For some, it was a financial imperative. For others, lockdowns became a chance to rethink their path. For each, it was a big risk on a new future..“My favorite part of the job is when I get a compliment from a customer.”Tre’Vonte CurrieTre’Vonte Currie frying fresh wontons during his dinner shift at Fahrenheit, where he’s learning the skills he’ll need to someday open his own food business.Amber Ford for The New York TimesFood has long been Mr. Currie’s passion.Amber Ford for The New York TimesMr. Currie prepping kale for salads.Amber Ford for The New York TimesWhen he was growing up, nothing brought Tre’Vonte Currie as much joy as food: his mom’s macaroni and cheese, the brownies and ice cream that fed his sweet tooth. Like a “mad scientist,” he created recipes for fried baloney, spaghetti and chicken Alfredo in his family’s kitchen.As a teenager, Mr. Currie dreamed of opening his own restaurant. It would be spacious and filled with warmth. Maybe there would be chandeliers. The food would include a range of cultural cuisines, from pizza to curry.At the start of the pandemic, Mr. Currie, 22, felt stuck. He had dropped out of high school in 2019 because he had had trouble focusing, even though he hadn’t found the curriculum difficult. He made money by doing odd jobs, like roofing and landscaping, around his Cleveland neighborhood, mostly from friends who wanted to help him out. But much of that work disappeared when Covid-19 swept the city.Then in August 2021, Mr. Currie’s mother learned about a free program near their home called Towards Employment, which offered career coaching and job search services. Mr. Currie was skeptical at first, but after speaking with the program’s coordinators, he signed up for two weeks of training in professional behaviors like how to dress for job interviews. Immediately afterward, he got a job at a restaurant in downtown Cleveland.In January, Mr. Currie took a new job at a high-end contemporary American restaurant, Fahrenheit, where he works 40 hours a week cooking and cleaning. He feels energized, knowing he is building the skills he needs to someday open his own business, maybe starting with a food truck.“My favorite part of the job is when I get a compliment from a customer about how good the meal was,” he said. “That lights up my day.”“I had generations before me teaching me to be a better mom.”Dwanét PerryDwanét Perry with her son. Nearly two years after being laid off, she has launched her own candlemaking business.Courtney Yates for The New York TimesMs. Perry has saved enough to move into her own apartment.Courtney Yates for The New York TimesMs. Perry sells her candles online.Courtney Yates for The New York TimesMs. Perry delivering for DoorDash, one of several jobs she juggles to support her family.Courtney Yates for The New York TimesDwanét Perry, 25, was six months pregnant when she was laid off from her job at a money transfer company in Queens in March 2020. The notice brought a jolt of pain and tough questions: How would she support herself and her baby? What could she do to move her life forward?Her son was born in June, and she moved the two of them into her mother’s home in Oradell, N.J. It was a painful period, but the bright spot was her family. She spent the summer surrounded by her mom, her grandmother and her younger sisters.“Everything there was cozy and comforting,” Ms. Perry said. “I had generations before me teaching me to be a better mom and telling me things I didn’t know.”Ms. Perry started thinking about how she might use the moment of upheaval to move toward her dream of doing something creative.She started watching YouTube and Instagram videos on candle making. Figuring that “everyone loves candles,” she decided to try making and selling her own. She melted soy wax in a double boiler and added oils to create different scents: pink sugar, cucumber melon, fallen leaves, sweater weather. She called her business Flame N Mama, in honor of her newborn son.Now Ms. Perry balances several jobs. She delivers for DoorDash three to four hours a day and was recently hired as a registration specialist at a car dealership. In the evenings, she makes and sells her candles to people who find her on social media.She was able to save up and move back to Queens with her son: “He has a very great sense of humor,” Ms. Perry said, laughing. “He loves to stick with his mommy.”“You have no choice but to be really good at it.”Liz MartinezLiz Martinez finds commonalities between her new career as a dental assistant and her old job as a beauty adviser.Christie Hemm Klok for The New York TimesMs. Martinez dropping her two daughters off at day care in San Francisco.Christie Hemm Klok for The New York TimesWhen Liz Martinez, 32, started training to be a dental assistant last year, she assumed it would be drastically different from her previous work as a beauty adviser at Sephora in San Francisco. But she found surprising commonalities: She practices the technical skills until they feel seamless, and she connects with clients and tries to ease their day.As a dental assistant, “you have no choice but to be really good at it,” she said. “It’s nice not being nervous.”Ms. Martinez hadn’t been closely following the news when Covid-19 started to spread in March 2020, so she was confused about why Sephora told her to put away makeup samples. Then she got an email that the store was temporarily closing. Soon after, she gave birth to her second daughter and wasn’t able to work because she had to look after her children during the day. She had no income to support her family.“I realized at that moment you can be surrounded by people and still be super alone,” she said.She learned that she could train to be a dental assistant through a local chapter of the Jewish Vocational Service, a nonprofit. She signed up for the three-month course: one month of Zoom classes, two months of hands-on training. By the fall of 2021, a clinic had hired her.The dentist she works with, Dr. Earl Capuli, continues to applaud Ms. Martinez’s improvement on the job, especially in mixing dental compounds. “The day I finally got it perfectly, he was bragging about it all day,” she said. “It’s really nice to hear positive feedback.”“That accident was the best thing that ever could have happened to me.”David LevyDavid Levy inside his second food truck, Tacos Cinco De Mayo.Lexey Swall for The New York TimesMr. Levy and his wife, Gloria, working in Arlington, Va.Lexey Swall for The New York TimesMr. Levy opened his first food truck with the insurance payout from a serious car accident.Lexey Swall for The New York TimesWhen the pandemic hit, David Levy, 61, was still reeling from a different life-altering disaster. In 2017, Hurricane Irma seriously damaged his family’s home in Florida, and Mr. Levy lost his job in construction shortly after, forcing him to pack up his belongings with his wife and three children and move in with his mother in Virginia.Mr. Levy struggled to find work in Virginia, so he started driving for Uber to make ends meet. When the pandemic struck, Uber trips fell off, and his income slowed to a trickle.Then he got a letter from the Senior Community Service Employment Program, which provides job training to older workers. In August 2020, he enrolled in a food entrepreneur workshop and had the idea to refashion a large storage trailer into a food truck. But he did not have enough capital to start his own business.And then something terrible and miraculous happened: A car accident left him with injuries serious enough to land him in a hospital. He won $65,000 in an insurance payout in August 2021 and used it to start a food truck business, Pizza Pita, which offers dishes that combine the flavors of Mediterranean and Colombian food.“It is crazy to think about it now, but that accident was the best thing that ever could have happened to me,” he said. “It made it possible for my dream of opening my own business to come true.”Mr. Levy, who was born in Colombia and has a Lebanese father, wanted to channel his heritage through cross-cultural flavor combinations. He recently converted to Judaism and was inspired by the Middle Eastern food he tasted during trips to Israel.Six months ago, he was financially stable enough to move his family out of his mother’s home and into one of their own in McLean, Va. Mr. Levy said his first food truck had been so successful that he opened another, Tacos Cinco De Mayo, last month.“Most days I work from 4:30 a.m. to midnight,” he said. “But no matter how hard it is, when you do something you love, it is worth it.”“I really needed to get out of that job.”Jane Watiri TaylorJane Watiri Taylor loading up her car with vegetables to sell to a grocery delivery service.Miranda Barnes for The New York TimesMs. Watiri Taylor’s tools for harvesting vegetables.Miranda Barnes for The New York TimesMs. Watiri Taylor bundling greens.Miranda Barnes for The New York TimesJane Watiri Taylor was working as a nurse at the Travis County Jail in Austin, Texas, when the pandemic hit. She called it the most frightening time she could remember in 10 years of nursing. Not only was she worried about catching the virus during her shifts, but some inmates took out their anger and frustration on her.“One time this person literally tried to spit on me,” she remembered. “They said, ‘I have Covid, and I’m going to give it to you.’ They spit on my scrubs; luckily it never got on my face.”For Ms. Watiri Taylor, 54, like so many other health care workers, “the burnout was real.”“I like taking care of people. But at that point, I was like, ‘I think I’m going to change jobs and start taking care of plants,’” she said. “You know, plants are never going to call me names, or insult or abuse me. I really needed to get out of that job.”In July 2021, she left to pursue a dream she’d had since her childhood in Kenya: to become a farmer.She had been growing fruits and vegetables in her backyard since 2015. To learn how to run her own farming business, she signed up for a class through Farmshare Austin, a nonprofit. She subleased a small piece of land in Lexington, Texas, to grow fruits and vegetables on a larger scale. She now sells her produce at local farmers’ markets.“I want to nurture people; that’s why I got into nursing,” she said. “With farming, you are still nurturing people, but in a different way. It is really satisfying when you grow stuff and are able to know that eventually it is going to help make sure someone has got food on the table and it is going to nourish their bodies. And to me, that’s enough.”Farming is much less predictable than nursing, and the financial instability worries her. Still, she says she is much happier than when she was working as a nurse.“Money is important,” she said. “But I want to be able to wake up every morning excited about what I’m doing. And that’s how I feel about farming.”“It was time for me to take a step back.”Adam SimonAdam Simon preparing sourdough loaves. He has no plans to return to his old career in finance.Tonje Thilesen for The New York TimesMr. Simon baking at the Entrepreneur Space in Queens.Photographs by Tonje Thilesen for The New York TimesLike many people, Adam Simon baked his own sourdough in the early months of the pandemic. He loved his pandemic hobby so much that he decided to turn it into a new career.In 2017, after working in finance for about 20 years, the 47-year-old left his job as a partner and director of research at the investment firm Echo Street Capital Management to spend more time with his family.“Every day of the week I was out the door before my kids woke up, and by the time I got home, they were asleep,” he said. “It was time for me to take a step back.”In June 2020, Mr. Simon, his wife and two daughters started baking sourdough bread and pastries and sharing the goods with their neighbors in Long Island.Though he had originally planned to return to finance, he decided instead to train himself to be a better baker. He read and watched everything he could about baking and worked in two local bakeries to hone his skills.In February 2022 he launched his own baking business, Sourdough Gambit, a homage to his love of chess.He makes his bread at the Entrepreneur Space, a food and business incubator in the Long Island City neighborhood of Queens, where he produces and sells about 300 baked goods each week. He hopes to open his own bakery and doesn’t plan to work in finance again.“It was a lot to walk away from,” he said. “But in hindsight, it was very much the right thing.” More

Announcing a half-yearly budget update in parliament, Sunak said he was increasing the threshold at which workers start to pay national insurance, or social security, contributions by 3,000 pounds ($3,958.50) this year.”That’s a 6 billion pound personal tax cut for 30 million people across the United Kingdom,” he said, adding the cut was equivalent to more than 330 pounds a year per worker, making it the largest single personal tax cut in a decade.But Sunak stuck to his plan to increase national insurance contributions from next month, part of his plan to fund more spending on health and social care after the COVID-19 pandemic.In his Spring Statement, he announced a reduction of one pence in the pound in the basic rate of income tax in 2024 while a cut in fuel duty of 5 pence per litre would start later on Wednesday and last until March next year.Sunak and Prime Minister Boris Johnson have been under pressure, including from lawmakers within their Conservative Party, to do more to help households as they struggle with the rising cost of living.Sunak announced new forecasts showing the British economy will grow more slowly this year than previously predicted, hit by uncertainty caused by Russia’s invasion of Ukraine, and that inflation will be much higher.The forecasts drawn up by the Office for Budget Responsibility (OBR) showed the economy was likely to grow by 3.8% in 2022, a sharp slowdown from a forecast of 6.0% made in October.Inflation, as measured by the consumer price index, is now seen at 7.4% in 2022, compared with October’s forecast of 4.0%.Earlier, data showed Britain’s consumer price inflation hit a 30-year high of 6.2% last month, driven by soaring costs for energy and food, which poorer households especially may find hard to cut back on.The OBR forecast that gross domestic product would grow by 1.8%, 2.1% and 1.8% in 2023, 2024 and 2025. In October, the OBR had forecast growth of 2.1%, 1.3% and 1.6% over the next three years. ($1 = 0.7579 pounds) More

UK inflation rose to a 30-year high last month, putting fresh pressure on chancellor Rishi Sunak to announce greater support for households when he delivers his Spring Statement on Wednesday.The Office for National Statistics said the consumer price index rose at an annual rate of 6.2 per cent in February, up from 5.5 per cent in January and the highest rate since 1992. Economists in a Reuters poll had predicted 5.9 per cent. The recent surge has been driven by soaring global prices for energy, petrol, food and durable goods: the ONS said the biggest factors driving the February increase came from transport, furniture and household goods. Prices for clothing rose especially rapidly in February, but food inflation also picked up to an annual rate of 5.1 per centYael Selfin, economist at KPMG, said the figures confirmed a “worsening squeeze on consumer incomes” that could force the chancellor to do more to shield those most affected, and add to pressure on the Bank of England to raise interest rates.Kitty Ussher, chief economist at the Institute of Directors, said the data showed rising inflation was now “hard-wired into routine business decisions”, adding to uncertainties and leaving households reliant on benefits with their incomes lagging far behind prices.February’s CPI reading is higher than analysts had expected but inflation is set to rise even more sharply in April, when regulated energy prices will jump. The Bank of England warned last week that CPI would rise above 8 per cent by June and could reach double digits towards the end of the year if Russia’s invasion of Ukraine kept global energy prices at elevated levels.

Jack Leslie, senior economist at the Resolution Foundation, said February’s figures were “a foretaste of the huge income squeeze coming”, which would be a “complete disaster for living standards”.Sunak will promise to “stand by” families hit by rising living costs when he publishes economic forecasts alongside today’s Spring Statement, with measures likely to include a cut in fuel duty.But he is unlikely to use all the headroom afforded him by a recent recovery in the public finances, because the Treasury is nervous that higher inflation and interest rates will raise the cost of servicing government debt more than it will boost tax revenues in the coming year. About £500bn of debt payments are linked to the legacy RPI measure of inflation, which rose to 8.2 per cent in February. More

Governor Lee Ju-yeol said in a speech wrapping up his eight-year term at the Bank of Korea that as high inflation was expected to continue “for a considerable period” and there was a need to reduce financial imbalances, “it is necessary to continue reducing the degree of monetary policy easing”.Lee, who has presided over 76 rate decision meetings in total, ends his term on March 31 and will pass on his duties to Rhee Chang-yong, a veteran technocrat at the International Monetary Fund.The BOK held its base rate unchanged at 1.25% at its February meeting, after back-to-back hikes on surging coronavirus cases and escalating tensions in Ukraine.Even then, Lee said expectations of more rate hikes by the bank to about 1.75% or 2.00% were “reasonable”, adding that there was a stronger need to respond with policy actions to stabilise prices.In February, the bank sharply raised its inflation forecasts to 3.1% from 2.0% for this year, while keeping its growth forecast unchanged at 3.0%.Lee, however, said on Wednesday the BOK’s February forecast did not include the Russian invasion of Ukraine and signalled a revision may be made later.”Russia’s invasion of Ukraine came soon after (our last meeting) and the economic conditions have worsened since then,” Lee told reporters.”We will still have to monitor the development of Russia-Ukraine conflicts and its impact … but it is true that we are concerning that the Russia-Ukraine war will bring much higher inflationary pressure and add strains on growth,” Lee added.Russia calls its actions in Ukraine a “special military operation”. More

SEOUL (Reuters) -South Korea on Wednesday nominated veteran International Monetary Fund official Rhee Chang-yong as its new central bank chief, a pick who is widely expected to continue the bank’s efforts to curb inflation with aggressive interest rate hikes.Rhee, currently the director of the Asia and Pacific Department at the IMF, will join the Bank of Korea as Asia’s fourth-largest economy battles surging prices, driven by supply chain snags and the Ukraine war.He succeeds Governor Lee Ju-yeol, whose term ends March 31 after eight years helming the bank.Economists say while Rhee, 61, is likely to be less hawkish than Lee, affecting the make-up of the bank’s seven-member board, he is not expected to significantly alter the BOK’s current policy posture.”Looking at his past comments and reports, he is more of a dove, although he won’t reveal such a stance given current economic climate,” said Kyobo Securities economist Paik Yoon-min. “But I do think that the BOK’s board might end up with more dovish colour.”The BOK next reviews its policy rate on April 14 and analysts expect the board to take the base rate to 1.75% by end-2022 from 1.25% currently.Kong Dong-rak at Daishin Securities also said Rhee would be less of a hawk than Governor Lee, although “he won’t blatantly make that clear until after a few hikes.”The BOK has raised interest rates three times since August to hose down inflationary pressures and a build-up of financial imbalances, making it one of the world’s more hawkish central banks.Governor Lee on Wednesday reiterated the need for further policy tightening as the economy struggles with red-hot inflation.TRANSITIONSThe change in bank governor comes amid a wider political transition in the country with conservative President-elect Yoon Suk-yeol set to take office in May, replacing outgoing leader Moon Jae-in.Moon’s office said on Monday the president had discussed the nomination with Yoon, although Yoon’s transition committee released a separate statement saying the nomination had not been addressed in conversations.Before commencing his four-year term, Rhee will be subject to questions from lawmakers about his economic expertise and ethical standards.Members of the National Assembly often grill those tapped as top officials in parliamentary hearings, although Rhee’s nomination does not formally require legislative approval.Such hearings in the past have focused on a wide range of personal matters, including nominees’ property transactions, tax histories and even the military service of relatives.As a director at the IMF, Rhee currently oversees its lending operations and surveillance work across Asia-Pacific.Before joining the IMF in 2014, Rhee served as chief economist at the Asian Development Bank and a Sherpa for the country’s G-20 Presidential Committee when South Korea hosted the group’s summit in 2010.He has worked closely with finance ministry officials, including former vice finance minister Choi Sang-mok who is now a part of President-elect Yoon’s transition committee. More

The attempt by US president Joe Biden last week to extract a promise from China’s leader Xi Jinping not to give material support to Russia’s invasion of Ukraine was always going to be a long shot. The fact that after two hours it ended with little more than mutual threats of sanctions should be a wake-up call to foreign businesses operating in China.The risks of doing business in China have been escalating for some time. Tensions between Washington and Beijing over technology exports, the mass incarceration of 1mn Uyghurs and other Muslim groups in Xinjiang, and the crackdown in Hong Kong, have forced many companies to think about contingency plans. Supply chain disruptions caused by the Covid pandemic then drove home the dangers of relying on China for key components or products. But the underlying assumption held by many companies has been that, in the end, China’s interest in economic and political stability would stem any rash actions such as a military move on Taiwan. Few companies are yet willing to ask whether the risks of dealing with Xi’s increasingly authoritarian regime are beginning to outweigh the benefits of being in a market of 1.4bn people. Volkswagen, which relies on China for at least half its annual net profit, has even been prepared to brave the reputational risk of having a factory in Xinjiang.“In the past year . . . companies have been scrambling to find a solution to maintaining their economic interests in China while realising they are exposing themselves to political risk,” says Max Zenglein, chief economist at the Mercator Institute for China Studies. “They lacked a concrete example of what this means and didn’t anticipate how quickly this could escalate.” Russia’s aggression may have changed that calculus, however. In less than four weeks, more than 400 companies have pulled out of Russia or suspended operations, according to the Yale School of Management. Some have left for fear of being caught by sanctions but others — such as McDonald’s, Starbucks, TJ Maxx or Uniqlo — have recognised the risk of a customer backlash if they stay open. The Russian crisis “makes them realise that maybe they need to factor these risks more heavily into their calculations”, Zenglein says. “It is a case study for how the global system can unravel.” It would not be that easy to quit China, which is the world’s largest importer and exporter of intermediate goods used to make a finished product. In 2020, China’s share of foreign direct investment rose to an all-time high of 25 per cent, according to the Peterson Institute for International Economics. But a report by Merics’s Zenglein points out that while certain industries (the auto sector) and countries (Germany) rely heavily on China, the dependence of European business can be overstated. A survey of 25 listed EU companies from different countries revealed that on average they derived 11 per cent of revenue from China in 2019.A few — notably on the Republican right in the US — are suggesting that businesses decouple entirely from the country. That would spell disaster for the global economy. But some executives are reassessing the principles that have previously guided their China plans.“Things you would normally do because it made commercial sense to do them, you have to ask if it makes sense any longer,” said a senior executive at a European multinational, who asked to remain anonymous to protect the company’s interests. “Is this supplier relationship going to be feasible in an environment where the prospect of sanctions is just around the corner?”Corporate lawyers such as Dan Harris of US-based Harris Bricken are advising clients to start thinking about “asset light” strategies, such as licensing or franchising where appropriate. At the very least, diversification of manufacturing elsewhere in Asia, or even further afield, should be a priority.It may also be wise to ensure that in future Chinese operations are dedicated to the local market, separate from the rest of the world. “In the past people might have chosen to create global export capability around a nucleus in China. But they aren’t going to do that any more,” the executive said. Most China experts believe that Beijing has no imminent plans to follow Russia’s example with an invasion of Taiwan. But many Russian experts also thought Moscow would not send tanks across the Ukrainian border. The lesson of Russia’s invasion is not just that the unthinkable can happen, but that the consequences can play out at a speed and scale few had imagined [email protected] More

The cost of living crisis will make Boris Johnson’s plans to tackle the UK’s regional inequalities much more difficult to achieve, according to Andy Haldane, outgoing head of the government’s levelling up task force.At the end of his six-month sabbatical overseeing the government’s levelling up white paper, Haldane acknowledged that some of the people who would be hit hardest by soaring inflation would be those living in the “left behind” areas that the prime minister’s flagship policy is meant to help.The former Bank of England chief economist accepted the government’s 12 key goals to reduce regional inequalities would be negatively affected as a result, but insisted this would not undermine the policy.“The cost of everything — including borrowing, energy, goods, service, of people — has gone up,” Haldane told the Financial Times. “It’s going to make [the levelling up goals] harder to achieve, and even more important to achieve.”He suggested that the burden of surging inflation would fall disproportionately on people and places most in need of the government’s levelling up agenda.“This is why I have a degree of confidence that, far from taking the wind from the sails of levelling up, the cost of living crisis makes [the policy] even more of an imperative economically, socially and politically,” added Haldane. The chief executive of the Royal Society of Arts joined the Cabinet Office on a six month secondment last year to help provide much-needed substance to Johnson’s levelling up plans.

Haldane, 54, who grew up in a Yorkshire working class household, was picked by Johnson and Michael Gove, levelling up secretary, as a longstanding champion of left behind areas.He said the government would introduce legislation by June that would make it “difficult to upend” the 12 policy “missions” contained in the 332-page white paper — including increasing business investment and tackling violent crime — by enshrining them in law. The goals are meant to be achieved by 2030.Labour criticised the white paper unveiled in February for not being accompanied by new government funding: instead ministers pointed to money contained in chancellor Rishi Sunak’s spending review last October.Haldane suggested that more money for levelling up may be allocated in the coming years. “The missions are 2030 missions that span multiple spending reviews; we’ll have several more bites at this cherry,” he said.The first marked outcome from the white paper is expected to be further devolution in England via the creation of several directly elected “county mayors”.These local leaders are expected to have similar powers to so-called metro mayors such as Sadiq Khan in London and Andy Burnham in Manchester, who have a big say over initiatives to boost economic growth in their areas.Haldane argued that levelling up was about forging a “new model of government”, not merely spending more money.Whitehall should aim “to empower and enable others to regenerate their place”, he said.Haldane added that the civil service, seen by some as a centralising force in London, was “getting” what levelling up was about, although he admitted it was a “work in progress” for certain Whitehall departments.Critics of levelling up have said Johnson’s plans are a response to cuts to public services introduced by former prime minister David Cameron, particularly reductions in local government funding.

Haldane said rebuilding civic institutions was “absolutely sine qua non of making good on levelling up”.He supported a call by Gove that control of some taxation — the levelling up secretary has suggested business rates — should be handed to mayors.“So far the debate about devo has been devolution very largely of powers to spend, but not enough power to tax,” said Haldane. “Do I see the endpoint of this evolutionary trajectory needing to be one in which local areas have greater powers to tax as well to spend? Yes, I do.”He outlined several initiatives to drive forward the white paper’s objectives.Gove’s department for levelling up, housing and communities is hiring a dozen “levelling up directors” to focus on ensuring central and local government combine on implementing the white paper’s 12 key goals. Meanwhile, a new committee of cabinet ministers is meeting “almost weekly” to focus on “levelling up considerations”.Haldane outlined two main types of places that would be targeted by levelling up measures.He said the first were “city regions that are punching below their potential”, adding that some of the UK’s most successful cities, including Glasgow and Manchester, underachieved compared to European peers.The second were “stranded towns” that did not form a part of a city region. Haldane said the aim was “less about becoming some hub for business, and culture and finance” but improving metrics such as “life satisfaction, happiness, health outcomes . . . a nice high street with decent shops, reasonable transport”.Johnson is betting his government will have made enough progress on levelling up in the next two years for it to form a core part of his pitch to voters for a second term in office, particularly in so-called red wall areas that the Conservatives seized off Labour at the last general election.Haldane said a “downpayment” would have been made by 2024 on some of the white paper’s core goals — including tackling illiteracy and innumeracy — but others, such as improving life expectancy, will take longer.“What people really want is a sense of the tide having been turned, it’s all about direction of travel rather than destination,” he added. More