Wednesday, December 06, 2017

Low Pay UK

A new report from the Joseph Rowntree Foundation (JRF) highlights that a long period of reduction in poverty (defined as those living on less than 60 per cent of median incomes after housing costs) came to an end around 2010.

It probably sounds rather odd to hear about a rise in UK poverty given that, as government ministers frequently remind us, more people than ever are in work. But dig into the detail and it emerges that employment is by no means the shield from poverty.

2.7 million of the four million children in poverty in the UK live in households where an adult works. In fact, of the 13.9 million people in this country who are in poverty, some 3.7 million (a quarter) are actually in employment.

The Institute for Fiscal Studies has identified a surge in part-time employment by low-income working-age men over the past two decades. In 1995 only 5 per cent of men on low hourly wages worked part-time. Today 20 per cent do. It seems unlikely this group has decided, en masse, to put their feet up and accept the financial consequences of a deep decline in take-home wages. If they could do more hours they probably would.

Other IFS work suggests that the prevalence of poverty among working families with children stems from weak earnings among full-time male earners in single-earner households, rather than an explosion of part-time work. But the underlying problem of a labour market that is not providing for those at the lower end is significant and seems to be getting bigger.

Despite propaganda to the contrary, poverty in 21st century Britain is not the consequence of a feckless or work-shy section of the population. It is the consequence of work that does not pay enough and a labour market that is not providing the opportunities that we need it to.

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