Sustained employment does not eliminate in-work poverty

The Resolution Foundation has reported that sustained employment does not eliminate in-work poverty for too many households, highlighting the need for wider support.

Published in partnership with Clarion Housing Group, the research found that poverty rates fall from 35 per cent to 18 per cent when people move into work. Working hard(ship) also explores whether housing tenure has an independent effect on poverty rates, given that social housing tenants in work are more than twice as likely to live in poverty than home owners and those in private rented accommodation.

The report shows that 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 Resolution Foundation claims that the challenge of escaping in-work poverty is particularly difficult for social housing tenants.

The charity 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.

Lindsay Judge, Principal Analyst at the Resolution Foundation, said: “With almost seven-in-ten 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.”