York Festival of Ideas The World of Work Today In work poverty Jonathan Bradshaw 16 June 2017

Argument Ministerial mantra “work is the best way out of poverty” Used to justify Benefit cap Two child limit Cuts to Employment and Support Allowance Rent limits Harsh conditionality and sanctions regime May be a way out of poverty But for families with children, even when working full-time on the National Living Wage, social security/cash benefits are vital They have been the main target of austerity

One earner working 40 hours per week on the minimum wage in May 2016 (£7.20 per hour). Rent=£120, Council tax=£30,Childcare for lone parent=£152

Child poverty rates Child poverty composition   Before housing costs (BHC) After housing costs (AHC) All lone parents 27 47 All couples with children 18 24 Lone parent working full-time 15 29 Couples with children both working full-time 3 5 Couples with children one parent in full-time work 26 37   Before housing costs (BHC) After housing costs (AHC) All adults in work 26 29 At least one adult in work, but not all 42 40 Workless households 32 Child poverty rates by working status of parents 2015/16 Table 4: DWP (2017) Households below average income

York Living Wage Project 2014 York City Council, Joseph Rowntree Foundation and York St John University became Living Wage employers. Swaffield, J., Snell, C., Tunstall, B. and Bradshaw, J. (2017) An evaluation of the living wage: identifying pathways out of poverty, Social Policy and Society, accepted 24 Jan 2017 Findings: Not all living wage employees were in poverty before – living standards determined by household income, number of earners, hours worked. Not all living wage employees were lifted out of poverty after living wage – even if working full-time and taking up all in-work benefits. 32% still in poverty AHC. Many of those still in poverty wanted and needed more hours. And higher in-work benefits

Conclusion (Low paid) work is not the “best way out of poverty” George Osborne’s “national living wage” is welcome though it is not the Living Wage. But it is undermined by frozen and cut in-work benefits. This brings the cumulative loss since 2010 to £27 bn/year. The post 2015 cuts by 2021 couples with two or more dependent children will lose £1,450/year, lone parents with two or more will lose £1,750/year. The Institute for Fiscal Studies expects UK relative child poverty to increase from 19% in 2014/15 to 27% in 2021/22 before housing costs and from 29% to 36% after housing costs.