Almost 60% of the poor now live in households where at least one person has a job, a figure more than 20% higher than in 1995. Few are stereotypical gig economy workers such as Uber drivers or fruit pickers. They are cleaners and call centre workers, waiters and shelf stackers, childminders and rubbish collectors, workers whose labour is essential to society but whose pay and conditions push them to the margins.
Poverty is often seen as a problem of worklessness. Today, though, it is a problem of being in work. The American sociologist Matthew Desmond recently wrote of the job market in the US: “The question is not: can I land a job? (The answer is almost certainly: yes, you can.) Instead, the question is: what kinds of jobs are available to people without much education? By and large, the answer is: jobs that do not pay enough to live on.” Much the same is true of Britain.
According to some figures, almost a third of British workers comprise a “precariat” – workers lacking job security and benefits, often shifting from one short-term position to another. “Flexibility”, a word much touted, may be valuable for those who don’t want the restrictions of full-time work, or who need to juggle commitments, but it has also become a euphemism for jobs with little certainty and for workers forced to inhabit the margins of the labour market.
While the nature of jobs has changed, real wages have fallen. An IFS report showed that median real earnings are still 3% below where they were in 2008; for those in their 30s, they are down by 7%. Nor is it just work and pay that are the issue. The changing of the structure of the housing market has also exacerbated in-work poverty – those in the private rented sector are far more likely to be in the working poor. As are those with fewer educational qualifications.
From the mid-1990s, governments have tried to offset rising in-work poverty through the benefit system. Tax credits have risen, from £7bn a year in the mid-1990s to a peak of £32bn in 2011. Since then, they have been cut as part of the austerity programme. The impact of these cuts, together with the rolling out of universal credit, could be devastating for the working poor.
In reality, the welfare system is an acknowledgement and an indictment of the inadequacies of the market system. Nothing reveals this more forcefully than the existence of the working poor and the creation of a welfare system to support them. The state is, in effect, subsidising employers so as to allow them to get away with paying indecent wages and unacceptable benefits.
Taken from here
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