UK poverty crisis despite rising employment
Updated: Aug 22, 2021
It has been revealed that 58% of UK households in poverty actually have at least one adult in work, despite the belief that working is the way out to get out of poverty. This shocking statistic comes from the Institute of Fiscal Studies (IFS) and has caused experts to say that it “highlights one of the biggest issues” facing our society.
IFS, one of the country’s most respected think tanks, won the 2019 award for ‘statistic of the year’, but the contents of the figure definitely take away any cause for celebration. The cases of in-work poverty have increased rapidly over time – in the mid 1990s the stat stood at 37%, but that figure has now risen to 58%.
Paul Johnson, speaking from IFS, said how this is “one of the biggest social changes we’ve seen in the past 25 years” and pinned the changes on a number of factors including an increase in house prices, and earnings failing to match up with that.
The assumption that working to get out of poverty is contradicted by these findings. Helen Shan, the Executive Director of the Royal Statistics Society looked at this: “Policymakers have focused on work as the best route out of poverty, but our winning statistic shows that this will not be enough to eradicate the scourge of poverty in the UK.”
Poverty is defined as a household with an income being 60% or less than of the country’s average. Currently, this average is around £25,000 in the UK, so if your household earns less than £15,000 per year, you’re technically labelled as being in poverty.
The problem keeps coming back to housing costs. There has been a big boom in employment, which initially seems like a good thing, but the jobs aren’t bringing in enough money. Liam Doherty, who experiences poverty first-hand, reflected this difficulty: “You want to work, but low-paid work can sometimes make it harder financially.”
Helen Barnard, Head of Analysis at the Joseph Rowntree Foundation that funds the IFS, has put the problem down to the UK economy. She says it “is not working for low-income families” and that a combination of high rent, low wages, and cuts in working-age benefits means that there is a higher risk of poverty.
Paul Johnson reflected on this imbalance too, concluding that “our housing market has rewarded the better off and punished the poor” because costs for poorer households has increased far quicker than for richer people. He also touched on the steps needed to be taken to solve the problem: “we’re not going to be able to fix in-work poverty without doing something serious about housing.”
Labour MP for Bradford West, Naz Shah, argued that zero-hour contracts mean that people have no job security. Additionally, people may have two or three jobs, but because those jobs haven’t seen wage increases in years, they are unable to get out of the poverty category no matter how much they work.
Currently, the government are set to change the way they measure poverty but there aren’t any actual plans in place. In 2016, child poverty targets were removed by the government, and nothing has been introduced since. When the measures are released, they should give us a better idea of what the future of poverty in the UK will look like.