Income and Poverty

In work poverty: what it is, what it isn’t, why it matters

  • Published: Dec 07, 2016
  • Author: Peter Kenway
  • Category: Income and Poverty

In work poverty: what it is, what it isn’t, why it matters

Nothing in Monitoring Poverty and Social Exclusion – the 19th annual report is published today by the Joseph Rowntree Foundation – causes more confusion than what we mean by “in-work poverty”. With poverty measured using household income, either all the people in a household are in poverty or none are. Extending this logic, all a household’s members are in in-work poverty if the household is in poverty and at least one of its members is in paid work. On the latest numbers for 2014/15, 7.4 million people in the UK are in in-work poverty, which at 55 per cent of all those in poverty is a new record.

But this does not mean – as the RSA recently splashed in their magazine – that “more than 50 per cent of people living in poverty are in work”. That’s not right. The number of people in in-work poverty who are working is 3.8 million. That is still more than 25 per cent of all the people living in poverty and one in eight workers overall. And over the last 10 years, the number of workers in poverty has grown by a million – up by a third. That is pretty big.

The remainder of people in in-work poverty are 2.6 million children and one million non-working adults. Who are these non-working adults? Nearly three quarters of them are women. The biggest single reason the million give for being non-working is “looking after home or family” (45 per cent), of whom 91 per cent were in a family with children, and 67 per cent of whom had a youngest child under the age of five. The other two most common reasons given for not working were “unemployed” (20 per cent) and “sick or disabled” (16 per cent).

However, as the graph below shows, it is quite wrong to think that this gender split means that in-work poverty as a whole is mainly “he works, she doesn’t”. The graph shows all the 4.8 million men and women in in-work poverty, by their individual work status.  The ‘not-working’ adults make up less than a quarter (22 per cent) of the total. Women are the majority among all adults in in-work poverty (52 per cent). They also slightly out-number men among employees in in-work poverty (31 per cent to 29). For all practical purposes, in-work poverty is just as much about women who are working as men who are working.

The 4.8 million men and women in in-work poverty, by individual work status

 

We see those experiencing in-work poverty as everyman (or more accurately, given what the graph shows, everywoman). If we ease her problems; be it low hourly pay (especially in part time work), her caring responsibilities that limit the hours she is able to work, the barriers to social inclusion she faces due to disability, the high cost of renting somewhere to live or even the fear that losing her job will threaten the very security of her family, then we will also be easing these problems for many more people,  who are a little further up the income scale, better off, but still only just-about managing.

In giving this group a name (and a relatable one, at that), Mrs May has brought this wider group into the political and policy spotlight. This group must include those who are poor, both working and not. It has implications for policy: the nostrum that public money should be spent in ways that “help those who need it most” will no longer do when those who need it might make up a good half the population. “Those who need it most” policy leads directly to means-testing. Whereas what the just-about-managing need is something closer to Ed Ball’s progressive universalism. In practical terms, a shift from the former to the latter would be marked by a shift in emphasis from the steeply means-tested child tax credits or universal credit to the almost universal (its top end having been shorn under the Coalition) child benefit.

The poverty measures – in the plural – we use are part of a consistent, 20 year-long, official set. They and the data to which they belong are a wonderful resource. Over the last 13 years, these statistics show that the principal overall poverty rate has not budged from 21 per cent. Yet in that time, the mix of people in poverty has slowly but steadily changed. In Monitoring Poverty and Social Exclusion, we have tried to look at who these people are and what their situation is. We have done this in order to challenge politicians (and society as a whole) to devise ways of strengthening their situation. Focusing on those who have the least is a moral position. The hope now is this that perhaps, for a moment, advancing their interests as part of a wider group can be practical politics too.


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