Do public services work for low income working households?

  • Published: May 07, 2014
  • Author: Peter Kenway
  • Category: Services

There's nothing new about some working people having so little money that they are counted as being in in-work poverty. Even 20 years ago, when unemployment was at record levels, 4 in 10 of all children in poverty belonged to working households.

Nowadays it is more like 6 in 10 – way above half. The rise in poverty among working households with children has been more than matched by a rise among working households without children too.

Whether in-work poverty shortly starts to fall or not, it is going to remain a huge fact of life.

Looked at from the outside, the "answer" to in-work poverty is quite easy to see. What most low income, working households have in common is that the adults in them are not working "enough". Such a household is either one where people are working only part-time or (where there are two adults) where one isn't working at all.

For a long time, government was reluctant to recognise in-work poverty – work was the route out of poverty and in-work poverty didn’t fit with that story at all. But when it did face up to it (before 2010), it started to think about how the tax credit and benefit rules could be changed so as to "encourage" longer working hours.

The change to the 16 hour rule for working tax credit was one response. The pressure that Universal Credit will apply to anyone earning less than what they would get doing 35 hours at the minimum wage is another.

There are quite a few things that could be said about this drive to get these "part-working" households to work more. One is: are we sure that the cure isn’t worse than the disease? Put more constructively, what has to be done to make sure the cure isn't worse than the disease?

Nobody wants to be short of money but they don’t want to be too short of time either. For parents with children at home that’s especially so. Even if the hours of work are fine in a good week, the flexibility to work a bit less, or change hours at short notice, is really important. Perhaps your own parent suddenly has to go into hospital; or the person who normally looks after your child before you get home on Thursday can’t do it this week; or there's a problem in school and you have to go in; or you need to ring the council in their working hours, and the call is going to be too costly if it has to be made on the mobile round the corner from work.

Obviously we are not saying that the low income side of in-work poverty doesn’t matter. Obviously too, employers have to change. But we can also ask: do services, from public transport to GPs, schools and call centres – do they work for people who are short of money and short of time? We think it is time this question was asked. It won't end in-work poverty but it will make it easier to cope with. It will also benefit people with a bit more money too – which is the sort of win-win that politicians are likely to support.

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