The number of working people living in poverty has risen sharply over the past 25 years, driven in part by higher rents and slower wage growth, research from the Institute for Fiscal Studies (IFS) has revealed.
The IFS report, commissioned by the Joseph Rowntree Foundation, estimates almost a fifth of working households are affected by relative poverty – defined as a household income lower than 60% of median income – meaning it afflicts around eight million people in Britain. Xiaowei Xu, one of the authors of the research, said the gradual rise – from 13% in the mid-1990s to 18% in 2017 – “are the result of complex trends”.
Two key reasons “are steeper housing costs for the low-paid, including higher rents and lower housing benefits, and much slower growth in their earnings compared with higher earners”, according to The Independent.
Citing a separate UN report examining poverty in the UK over the past decade, Bloomberg reports that “in-work poverty has scarred the UK since the financial crisis, the result of years of wage stagnation and cuts to benefits as the government sought to bring down the budget deficit”.
Another report from the Joseph Rowntree Foundation, published last year, claimed more than half a million British workers have been swept into working poverty over the past five years.
The Guardian said it was “the latest sign that the link between entering work and making ends meet has become increasingly frayed in 21st-century Britain”.
“Nearly all of the increase comes as growing numbers of working parents find it harder to earn enough money to pay for food, clothing and accommodation due to weak wage growth, an erosion of welfare support and tax credits and the rising cost of living,” says the newspaper.
The growing number of in-work poor will raise further questions about record levels of employment. Unemployment has dropped to its lowest level since the 1970s, but this includes underpaid or precarious job roles.
https://www.msn.com/en-gb/money/career/why-is-in-work-poverty-on-the-rise/ar-AAD9yRL?ocid=spartandhp
Posted: 31st July 2019