Call for good quality work to tackle growing poverty divide

Good work – paid at a living wage and offering progression pathways – is vital if the kind of social issues Covid has exacerbated are not to become entrenched, according to a range of reports and experts.

The latest warning comes in a new flagship report from the Joseph Rowntree Foundation which  finds that families in poverty are starting 2021 reeling from a triple financial blow: the pre-Covid combination of low-income jobs and falling benefits which made many families hugely vulnerable to the pandemic, the fact that many of those families were working in sectors which were hard hit by Covid and, now, a third lockdown and economic shock which will push many families to the brink.

The report says the Government must make tackling poverty an economic priority in 2021 or they risk being defined by a record of worsening hardship. That includes committing to a good jobs recovery that turns back the tide of in-work poverty.

The report calls for the £20 a week increase in Universal Credit, announced last year to help people through Covid, to be made permanent and for it to be extended to people receiving legacy benefits. The Foundation says there is strong public support for this move which would address the issues created by the benefits freeze which began in 2016
which meant support did not keep up with the cost of living.

The report says that, while hourly pay has been rising since 2014 because of increases in the minimum wage,
lower-paid employees have been offered fewer hours and little chance to progress at work. Women and traditionally marginalised groups have been worst affected. A third (35%) of Bangladeshi and Pakistani workers were in poverty in 2018/19 – around three times the rate for White workers (12%). Private renters were disproportionately affected, with more than a third living in poverty.

Poorest hit hardest

That was before the pandemic hit. Those already vulnerable saw the largest cut in their hours at the start of the pandemic.  81% of people working in retail and accommodation saw their income drop. Four in 10 workers on the minimum wage face a high or very high risk of losing their jobs compared to 1% of workers earning more than £41,500, according to the report. More than a third of single parents working in hospitality and over a quarter of those in retail were already living in poverty before their sectors were severely hit by restrictions.

Workers from Black and minority ethnic backgrounds are 14% more likely to be made unemployed and 13% less likely to be furloughed.  Around 45% of disabled people who were in employment at the start of the year reported no earnings by the middle of the year. One in three private renters were furloughed and 30% were worried about paying their rent through the winter, with 700,000 already in arrears in October.

The third lockdown is affecting those same groups the hardest, says the report.  Melanie, a former HR consultant living in Surrey, has been part of JRF’s UK Poverty Grassroots Action Group. She says: “Since I was made redundant in the financial crash I have been working whenever I can and I set up a new business in 2018, but the work dried up during the first lockdown and we had to close. I have been caring for my 88-year-old father as well as bringing up my son and I
haven’t been working since October. The job situation is pretty bleak.”

Helen Barnard, Director of the Joseph Rowntree Foundation, said: “It is a damning indictment of our society that those with the least have suffered the most before the pandemic and are now being hit hardest once again by the pandemic. The Government must now make the right decisions to avoid another damaging decade.

“2020 was an extraordinarily difficult year for all of us and has shifted the dial in terms of what support is possible. Learning from this, there are serious injustices we cannot put off tackling any longer. We must not rest until everyone, regardless of their background, is able to achieve a decent life.”

In addition to the uprating of benefits and increasing the amount of low-cost housing available to families, the report puts an emphasis on good quality jobs. It says: “Government must support people in the lowest-paid jobs, or people working part-time, to move into higher pay and access sufficient and secure working hours, including bringing forward the Employment Bill.”

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