Headlines: November 18th, 2004

The Government’s anti-poverty strategy should look more widely at people’s welfare, both inside and outside work. Millions of people in low-paid, insecure jobs need better training and working conditions and incentives, in order to realise their full potential and improve their living standards. Two reports from the Joseph Rowntree foundation reveal that as a result of a low pay culture there are four times as many low paid workers earning below two-thirds of the median wage than there were in the 1970s. Another difference is that in the 1970s most of the low paid workers were not the main breadwinners. Today low pay is more prevalent among breadwinners.The introduction of the National Minimum Wage in 1999 has had little impact. The low pay figure is little changed from before its introduction. Of those who are low paid, 14 per cent are in households living in poverty, that is where income is below 60 per cent of median income. This is an increase from 11 per cent from the mid 1990s. For the low paid who escape poverty only 8 per cent do so through their wages alone. Couples rely on partners’ earnings to stay above the poverty line, while lone parents rely mainly on benefits and tax credits.

The report calls for an examination of measures to address in work poverty including a flat-rate, time-limited benefit or tax credit to help people to make the transition into work and paid parental leave to help families where one parent is providing full-time childcare.

Links: http://www.jrf.org.uk/knowledge/findings/socialpolicy/n64.asp