Stagnating wages and job insecurity put households at risk of unacceptably low income, says new report
It’s been a day of bad news for workers – or more accurately, a day of confirmation, with the release of two sets of figures describing the difficulties working people face today in the UK.
ONS figures show that the number of people forced to work a second job has soared to over 100,000 due to the cost of living. Meanwhile, an Oxfam study shows that by next year the world’s richest one per cent will earn more than the rest of the world combined.
The Joseph Rowntree Foundation’s Minimum Income Standard (MIS) project is designed to define what constitutes an adequate income. It is based on public opinion about what goods and services are necessary to maintain an acceptable standard of living.
The Standard defines a fairly rudimentary list of things that people say they need not only to survive but to ‘participate in society’ – three square meals, adequate clothing, small electrical appliances, internet access, toiletries.
JRF note that although MIS is not a poverty threshold, almost all households that are officially defined as being in income poverty (having below 60 per cent of median income) are also below MIS.
The think tank’s most recent research into MIS, published today, paints a stark picture. It finds that the proportion of people living in households with an income below MIS increased by nearly a third between 2008/9 and 2012/13. In fact, the proportion of people below this level has increased almost every year since 2008.
The research finds that the risk of having a very low income – defined as less than half of the MIS – has ‘increased sharply’ in the four years to 2012/13.
Pensioners and couples without children are, as in past years, the most likely to have an ‘adequate’ (as opposed to well over the minimum) income. However, the proportion of couples without children on this minimum income is growing.
JRF suggests that changes in employment status may help explain the unexpected growth in numbers of people below MIS among certain groups, but that for most working households, the increase can be better explained by stagnant wages and cuts to in-work benefits than by people actually having less work.
This means that the risk of a household falling below MIS can increase even while employment status remains the same.
The study also finds that almost a quarter – 23 per cent – of young adults in childless households had been badly hit not only by poor job prospects but by low incomes when they did find work.
There are sharp regional variations in the findings. The biggest rise in the risk of living below the MIS has been seen in Wales, where a staggering 29.4 per cent of families with children now earn less than the living wage.
London remains the most ‘at risk ‘ area, with 29.9 per cent of households at risk of not having enough money for an ‘acceptable’ lifestyle. Least at risk of falling below MIS are people living in the east and south west.
JRF make a number of recommendations aimed at lifting people further above the threshold.
These include pegging minimum wage rates to changes in living costs and average wages – as the ONS showed today, the fact that basic earnings have not changed according to the cost of living is making daily life a struggle for huge numbers of people.
JRF urges more employers to pay the Living Wage, and allow earners to keep more pay before benefits are withdrawn.
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