Economic Recovery Not Reaching the Low-Paid

Young, working families are falling below the poverty line.

Working families are falling below the poverty line.

A staggering 13 million people in the UK today are in poverty, a report published by the Joseph Rowntree Foundation earlier this week has said. This isn’t news. What is, however, is the finding that the face of poverty in our country has changed significantly over the past decade. No longer is poverty something only pensioners and the unemployed face. In the UK today, half of those living in poverty belong to a working family. As things stand, the report warns, work no longer guarantees a route out of poverty.

The report also told us something most of us already know—that pay, in real terms, is falling. When increases in the cost of living are taken into account, average full-time hourly pay for men has fallen from £13.90 to £12.90 an hour; whereas for women the hourly rate has slumped from £10.80 to £10.30.

This comes at a time when employment is rising, with 300,000 more people in work since this time last year. But there is a problem. A majority—three fifths—of those who moved from unemployment to work in the last year are being paid below the living wage.

The living wage is intended to represent what is required to meet the cost of a decent standard of living in the UK. It is currently set at £7.85 an hour (£9.15 in London). The figures set each November are not just plucked out of thin air—they are the result of extensive public consultation and work with focus groups in which ordinary people like you and I decide what is required to have a ‘decent standard of living’. Therefore, in the words of the Living Wage Foundation, the idea of the living wage is ‘rooted in social consensus about what people need to make ends meet’.

So here we have huge numbers of people coming into work, only to find that they are not able to afford the things that most people agree is required to have a decent standard of living. That so many people coming into work are being paid less than this is telling. It demonstrates that—as it stands—the economic recovery simply isn’t having an impact on the lives of the low-paid.

Are people on the street feeling the economic benefits?

Falling living standards? The need for a higher Living Wage.

The solution to this must surely be to raise the minimum wage so that it falls in line with the living wage.

If you wish to deny this, you have two options. The first option is to deny that the figure of £7.85/hr does in fact represent the minimum required for a ‘decent standard of living’. If this is the case then either you disagree with the methodology of rooting such notions in social consensus, or you dispute their maths in turning this into a specific figure. Neither route looks particularly attractive. The very idea of what counts as a ‘decent standard of living’ is, surely, a paradigm case of something determined by social consensus. Whereas the number-crunching involved in producing the headline figure is open for all to see on the Living Wage Foundation’s website. There is nothing for them to hide.

Of course, the second option is to deny that people ought to be paid enough to afford a decent standard of living. No need, I hope, to say anything against this.

 

By Alex Wylde

Junior Writer for Daily Political View

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