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Why more and more working people are falling into the poverty trap
MORE than six million working people are living in poverty due to low incomes or lack of hours, a York charity warned today.
About 6.1 million people are living in poverty in working households – a higher number than the 5.1 million living in poverty in workless households, a report from the Joseph Rowntree Foundation (JRF) says.
The extent of in-work poverty has been blamed on low pay and lack of hours, said the annual Monitoring Poverty report, written by the New Policy Institute (NPI).
Julia Unwin, chief executive of the Clifton-based JRF, said: “The most distinctive characteristic of poverty today is the very high number of working people who are also poor.
“Many more people have experienced poverty since the downturn, cycling in and out of insecure, short-term and poorly paid jobs.
“Tackling poverty requires a comprehensive strategy, but overcoming the frail jobs market must be the starting point.”
The research has found that under-employment stands at 6.5 million and the number of people working part-time but wanting full-time work is now 1.4 million, up by 500,000 since 2009. A willingness among workers to do fewer hours is keeping unemployment in check, JRF said.
Meanwhile, the number of working families receiving working tax credits – payments to top up wages – has risen by 50 per cent since 2003, to 3.3 million in 2012. About 4.4 million jobs were found to pay less than £7 an hour.
Peter Kenway, director of NPI, said: “This year’s report challenges the myths surrounding poverty. Changes across five decades demonstrate poverty is not inevitable – reductions in child and pensioner poverty show that.
“The much cited ‘never-worked’ households actually only make up a very small part of the total number of workless households. The high level of in-work poverty undermines any idea that better incentives to enter work, the centrepiece of Universal Credit, is some kind of cure-all.”
The findings also show there was a dynamic nature of poverty, with people moving in and out of work and poverty, with almost five million people claiming Job Seekers’ Allowance (JSA) at least once in the last two years The turnover of those moving on and off JSA is significant – half stop claiming within three months.
JRF said changes to the benefit system and a combination of different cuts will hit a large number of families. “These overlapping effects are something to which the government has paid little attention,” said a JRF spokesman.
‘Life is a daily struggle’
YORK resident Paul Taylor* lives with the daily struggle of trying to afford escalating bills while living on the minimum wage.
Paul, 47, who lives with his teenage daughter in Burnholme, said despite working full time as a handyman, his minimum wage salary made life difficult.
He said his monthly salary just covered the cost of his mortgage, food shopping, council tax, running a car and paying for energy bills – for which he is in arrears.
Mr Taylor said: “It’s a real struggle. This time last year I was really, really struggling. Last year was diabolical. This year I have got child tax credits and working tax credits so it’s a little bit better, but still a struggle, especially coming up to Christmas.”
Mr Taylor said he was proud to have a strong work ethic, but said he could not remember finding things as tough as he had in recent years, “It’s making my hair go grey. I would say I’m worse off than I used to be,” he said.
*Name has been changed to protect identity