1. Poverty and deprivation Resolution Foundation
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Poverty and deprivation
Statistics for Action
Matthew Whittaker
Resolution Foundation
February 2015

2. Proportion living in relative poverty has been falling since the 1990s
After inequality-driven rise in poverty in 1980s, rate subsequently fell thanks to higher employment, more even growth and a policy focus
Downturn has produced usual fall in relative poverty and rise in absolute
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Poverty measured as 60% of contemporary median income BHC. Source: IFS.

3. But not everyone has benefitted, and recent improvements are set to go into reverse
Reduction in poverty since 1990s was sharpest for pensioners (not shown), children and their parents. Poverty rates among non-parents continued to rise
Austerity and slow wage growth is likely to produce a new increase in the coming years
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Poverty measured as 60% of contemporary median income BHC. Source: IFS.

4. Explaining the changing patterns of poverty among working-age families
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Non-parents
Poverty increased in the 1980s and 1990s due to rises in worklessness associated with unemployment and disability and growing wage inequality
Since the mid-1990s, it has instead been about generally poor wage performance among non-parents
Parents
Poverty increased in the 1980s and 1990s due to growth in worklessness associated with the rise of single parents and due to growing wage inequality
Poverty fell from the mid-1990s as worklessness declined and tax credits boosted the incomes of lower earners

5. Recent trends mean the poverty challenge has changed – increasingly about workers
Close to two-thirds of poor families with children have someone in work, up from two-fifths in 1994
Among those without children, the proportion has increased from around one-quarter to about two-fifths
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Source: Households Below Average Income

6. Among parents in poverty, couples in work now
form the most common group
Couples in which one adult works full-time and one is out of work or part-time account for two-fifths of poor families with children
Workless parents – especially single parents – have formed a declining share
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Source: Households Below Average Income

7. Workless households remain dominant in the non-parent group, but the balance has shifted
A clear majority of non-parents in poverty are single, and worklessness remains the most common condition
But the proportion accounted for by workless couples has fallen
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Source: Households Below Average Income

8. Which makes pay trends ever more important to poverty picture
Mothers’ pay has outperformed non-mothers in recent years, while fathers’ pay has lagged behind non-fathers
Means gender pay gap between mothers and fathers has narrowed by around 25ppts
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Source: Households Below Average Income

9. Meeting the new poverty challenge requires:
And points to an evolving focus for anti-poverty policy
in the coming years
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Meeting the new poverty challenge requires:
Securing a balanced economic recovery that feeds through to all members of society
Dealing with poor wage performance, especially among men (lab market institutions?)
Improving employment prospects for all, but especially within families reliant on a single income (childcare? social care? disability?)
Reconsidering the incentives and support offered by Universal Credit (a second earner work allowance?)

10. Maintain funding and coverage of the excellent HBAI
With implications for what we need from our
official statistics
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Maintain funding and coverage of the excellent HBAI
Improve public understanding of the true experience of poverty and deprivation and avoid complacency
Build our knowledge of the links between low pay and poverty – especially persistent poverty
Better understand the pressures faced by different groups through more nuanced approach to inflation measures and development of the poverty premium
Ensure we measure the effectiveness of policy interventions via RCTs etc.