William Eichler 04 February 2020

Work alone cannot eliminate poverty, think tank says

Policy makers need to focus on further interventions to reduce poverty, think tank says as a new report warns that work alone cannot eliminate poverty.

A new study from the Resolution Foundation has found that poverty rates fall from 35% to 18% when people move into work.

However, it also discovered that sustained employment does not eliminate in-work poverty for many households.

Almost seven-in-ten working age adults living in poverty today either work or live in a household where someone else does. This is up from fewer than five-in-10 two decades ago.

Social housing tenants in work more than twice as likely to live in poverty (34%) than home owners and those in private rented accommodation (13%). Poverty rates fall from 68% to 31% for social renters when someone moves into work.

The report, entitled Working hard(ship), argues that employment cannot entirely protect people from poverty, and that the benefits system has a critical role to play in supporting in-work households.

A single parent with two children, for example, 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 the same single parent now needs to work 23 hours per week to escape poverty.

Social renters face a higher poverty risk due to labour market disadvantages, according to the Resolution Foundation.

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. 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 think tank urges firms and policy makers to introduce policy interventions, 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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