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A new report shows that work does help many families out of poverty, but that benefits cuts have made things significantly harder for many, particularly single parents.
Single parents with two kids who are on the minimum wage have to work seven hours a week more to escape poverty because of benefit cuts, according to a new report.
The report, Working hard(ship) by the Resolution Foundation think tank in partnership with Clarion Housing Group says a single parent with two children would have had to work 16 hours per week on the minimum wage to escape poverty if no benefit changes had happened since 2010. However, those benefit cuts mean that same single parent now needs to work 23 hours per week to escape poverty.
The report, however, finds that, despite rising in-work poverty, work is still an important route out of poverty for many. It says poverty rates fall from 35 per cent to 18 per cent when people move into work and from 68 per cent to 31 per cent for social renters.
However, the report warns that even sustained employment cannot entirely protect people from poverty and that the benefits system has a critical role to play in supporting in-work households.
The challenge of escaping in-work poverty is particularly difficult for social housing tenants, says the report. Social renters’ higher poverty risk when working stems from significant labour market disadvantages, rather than factors such as family size, says the report.
Almost one in four social renters say they work part time because they cannot find a full-time job, compared to just over one in 10 workers in other tenures. And one in three social renters are in jobs paid at or very close to the minimum wage (compared to one-in-seven of those in other tenures).
The Foundation says that the growing problem of in-work poverty shouldn’t blind us to the importance of work as the main route out of poverty. However, it adds that firms and policy makers also need to focus on further interventions to reduce poverty, including: better progression routes into higher paid work; more childcare support for parents keen to work more hours; more new affordable homes (including social housing); and, a benefits system that provides strong work incentives at the same time as offering adequate support for low-income working families.
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Lindsay Judge, Principal Analyst at the Resolution Foundation, said: “With almost seven in 10 poor adults today either working themselves or living with someone else who works, the issue of in-work poverty is one of the biggest challenges facing 21st century Britain.
“But the rise of in-work poverty has led some to mistakenly downplay the importance of work in tackling poverty. In fact, finding a job halves someone’s chances of living in poverty.
“However, work alone cannot eliminate poverty. Support to sustain employment and progress out of low pay are needed alongside a benefit system that provides adequate support for low-income working families.”
Meanwhile, the Government says the roll-out of Universal Credit has been delayed a further nine months until 2024 and a new report from the Health Foundation found 36 per cent of UK workers is in a low-quality job that could be affecting their health.
The think tank defines roles which could damage workers health as those where work is underpaid, unfulfilling or where workers lack the resources needed to carry out their jobs properly. The report says workers in these roles are twice as likely to report poor health – 15 per cent compared to just 7 per cent of those in higher-quality jobs.