A WARM winter coat. A damp-free home. Fresh fruit and veg. A week’s holiday every year. Are these the bare necessities of life in the UK? What about broadband, curtains, or household insurance? It’s hard to pin down exactly what we mean when we talk about living in poverty. One man or woman’s luxury – a glass of wine on a Saturday night, a redecorated living room – may for another be the difference between living and merely surviving.
When we read that 60 per cent of those in poverty live in working households – the highest level ever recorded – what do we imagine their lives to be like? And when fewer than half of these households contain a low-paid worker, how do these sums add up?
The Cardiff University academics behind this latest research took as their primary poverty measure a relative one – the widely accepted threshold of 60 per cent of median income – but crucially also took housing costs into account. They crunched numbers from the DWP’s Households Below Average Income statistics, along with findings from the longitudinal Understanding Society survey, to produce a detailed picture of who is poor, and why.
We need to not only reject the assertion that ‘a job is the best route out of poverty’, but also challenge the assumption that to raise the minimum wage is to wave a magic wand
Their conclusions? That we need to not only reject the assertion that “a job is the best route out of poverty”, but also challenge the assumption that to raise the minimum wage is to wave a magic wand and make poverty history.
If such a large proportion of those in in-work poverty are paid relatively decent wages (typically defined as more than two-thirds of median hourly earnings), then one might reasonably ask where the money is all going. Why, for example, might someone end up at a food bank despite bringing in what many would regard as a perfectly adequate wage?
There are two main explanations: children, and rent. The Cardiff study found a key determinant of in-work poverty was the number of workers in the household, with single-worker households at much higher risk. It goes without saying that two adults with no children are likely to have more disposable income than a single parent of three, even if only one of them works or both earn relatively low wages.
If a single mother of four earns £60,000 a year before tax, the High Income Child Benefit Charge will eat up 100 per cent of her child benefit
It’s undeniably unfair that the High Income Child Benefit Charge brought in by the Tories takes no account of overall household income – so if, say, a single mother of four earns £60,000 a year before tax, the charge will eat up 100 per cent of her child benefit. This unfairness was of course highlighted when the charge was introduced in 2013, as was the false economy of clawing back benefits via such a clunky mechanism (those who stand to lose 100 per cent of value of their benefit are nevertheless still encouraged to claim it, so they can build up National Insurance credits). But the protests were a little muted – after all, one salary of £60,000 is still a fortune, surely?
The depends on how far it stretches, and this is where other measures of poverty become useful. Since the 1980s, researchers have been asking members of the British public what poverty really means to them, in practical terms. Is it about food and shelter, or something more? The results support the definition proposed in the (1970s) by Peter Townsend that poverty also means being “excluded from ordinary patterns, customs and activities”.
In the most recent survey, conducted in 2012, more than half of those questioned regarded a TV as an essential, something “which everyone should be able to afford and not have to go without”, 77 said the same about a phone and 80 per cent about a washing machine. Of course views have changed over time, as technology transforms our everyday lives, but not always in the direction we might expect. In 1983, 64 per cent thought new (rather than secondhand) clothes were essential for adults, compared to only 46 per cent 20 years later – after the arrival of super-cheap “fast fashion”. There was a similar drop in the proportion who consider a holiday away from home an essential – from 63 per cent to 42 per cent.
Wages have risen, but not in line with inflation and certainly not in line with rents and mortgage payments
So what has changed between then and now? Wages have risen, but not in line with inflation and certainly not in line with rents and mortgage payments. The housing market has changed beyond recognition since the 1980s, when the Right to Buy led to a surge in owner-occupation. In the past decade there’s been a big shift away from home-owning to private renting, and only in the last year – thanks to the uncertainty of Brexit – have rents begun to fall. While the Cardiff study found the highest absolute risk of in-work poverty was for those living in what social housing stock remains, the risk for those renting privately has risen the most sharply, by five percentage points between 2004/5 and 2014/15.
There’s little point in raising the minimum wage, or tax credits, or any other income source for families if the extra cash is going to go straight into the pockets of landlords. Sneaking a look at other people’s payslips tells us nothing about their ability to make ends meet – and participate in society – unless we can also see who they live with, and their outgoings. Any attempt to judge whether they are “really” poor by their occupation, their postcode or their Facebook posts is the first step on a very slippery slope indeed.
A version of this article first appeared in The National.