Richard Bilton, reporting for Panorama, describes how, despite persistent claims by mainstream politicians to be 'on the side of hard-working people', the majority of the poor are in work. Whilst the cost of basics like food bills and clothes has risen by 28 per cent over the last six years, average wages have only gone up by 9 per cent. This has put huge pressures on household budgets.
Poor wage growth for the lowest earners has been exacerbated by the recession rather than caused by it. Those on lower incomes saw their spending power increase from the mid-1990s, but this flattended off around ten years ago, and began to decrease as the economy shrunk.
Nor are state funded wage supplements a recent phenomenon. Ted Heath's government introduced them in the early 1970s, but only 71,000 people received them in 1971. In 2013, 3.3 million people claimed some form of in-work benefit. As a result supplementary benefits cost £28 billion per year, which means 'the government is paying people to go to work'.
Chris Goulden of the Joseph Rowntree Foundation links this to longer term trends in the economy, whereby globalisation leads to greater quantities of low skilled, low paid jobs in the UK. Although over the last year three quarters of a million people entered work, the majority of new jobs were in low paid sectors.
Donald Hirsch, Director of the Centre for Research in Social Policy, says that supply side solutions to this problem are not enough. Pushing more people through higher education is pointless if there aren't enough skilled jobs for them to go into.
The documentary pays attention to a group of people overlooked by policy: young single men. A lot of families with children are in poverty whether they are in work or not. But people without children aren't eligible for as much state support, and if they are single they don't benefit from economies of scale or sharing the cost of household bills.
- You can read a collection of evidence reviews on poverty by the Joseph Rowntree Foundation here.
- As part of this, the Centre reviewed the existing evidence on insitutional care and poverty, and you can read our full set of findings here.
This work is to form part of the first comprehensive, evidence-based strategy to reduce poverty in the UK.