07 December 2016
The Joseph Rowntree Foundation has called for the government to take urgent action to improve real wages after new research by the charity revealed one in eight UK workers now live in poverty.
People living in poverty are now more likely to belong to a working household than not, accounting for 55% of all people below the poverty line.
The number of workers in poverty has increased by 1.1 million in the last ten years to reach 3.8 million – 12% of the total workforce – while 7.4 million, 2.6 million of whom are children, live in poverty despite being part of a working family.
Overall figures show over a fifth – 21% – of the total population is now living below the poverty line.
A major driver of this crisis, highlighted in the Joseph Rowntree Foundation’s Monitoring Poverty and Social Exclusion 2016 report, is that pay rises are lagging behind a surging cost of living.
“The economy has been growing since 2010 but during this time high rents, low wages and cuts to working-age benefits mean that many families, including working households, have actually seen their risk of poverty grow,” Head of Analysis at the Joseph Rowntree Foundation, Helen Barnard, said.
“Families who are just about managing urgently need action to drive up real-term wages, provide more genuinely affordable homes and fill the gap caused by cuts to Universal Credit, which will cost a working family of four almost £1,000 per year,” she added.
The charity also highlighted that low-wage sectors such as retail, hospitality and care account for 24% of jobs and a third of the UK’s productivity gap, which sees us lag behind major international competitors in economic output. The organisation called on the government to support these industries to improve productivity and raise wages.
The Institute of Employment Rights recommends 25 policy changes, which have been adopted by the Labour Party, in order to raise wages and increase productivity across the economy.
In our Manifesto for Labour Law, we shift the focus of employment law from statutory minimums that give employers a floor to aim for towards collectively agreed conditions and wages. By encouraging collective bargaining at both sectoral and enterprise levels, we give workers the voice to negotiate for higher pay, better training, and fair terms, all of which can contribute not only to a better quality of life for workers but also to the upskilling of the workforce and therefore the productivity of businesses.
The Joseph Rowntree Foundation also pointed to other areas of the economy that require urgent action, including the surging price of rent in the private rental sector and slashes to in-work benefits. The charity called on the government to reverse cuts to Work Allowance, end the freeze on working-age benefits, build more affordable housing and fill the gaps in regional investment that will be left after EU funding is withdrawn.