Qualitative case studies of how real people are managing the Cost of Living Crisis is a useful way to provide insight into the reality of poverty in the UK in 2022, adding some necessary depth to poverty statistics which can be rather inhuman.
A very useful contemporary resource which does just this is a recent documentary from Panorama which aired in April 2022 and is called simply ‘Surviving the Cost of Living Crisis‘.
The documentary follows three working families – two two parent families and one single mum. All the individuals in the documentary have decent jobs and some even bring in the median income in the UK but all are living in relative poverty and having to make difficult decisions around how to spend their money.
One family earns £2000 a month, but after the mortgage, bills and food they are left with £63 a month to spend – which would just about cover a meal out for the family. The father of this family has a 75 mile round trip to work every day and they have found rising fuel prices recently have taken up a lot of their spare cash.
Another of the case studies is a single mum who works part time as a nurse – she can’t work more than three days because she can’t afford the cost of child care – and besides being employed she is dependent on food banks and hand-outs from friends. After her mortgage she is left with £80 a week fork food and everything else for her and her three children.
The documentary shows the dilemma of ‘heating or eating’ with some families having to stretch a few pounds on an electric or gas metre out for several days – expensive key metres don’t help here.
The adults of these families are going without food – one husband eats only one meal a day for example. And this causes stress to older children – who are aware that their parents are going without food and possibly say they are not hungry when they really are in order to make sure their parents eat more.
The documentary does a good job of showing how much stress being in poverty causes is also clearly a good deal of anxiety around future price rises and how they are going to cope.
The Video is available on YouTube here, at time of writing, but I don’t know how much longer it will stay up!
Inflation in the UK hit 9% in April 2022, mainly due to the rising cost of energy prices and food prices, the main cause of which was supply-line shocks caused by Russia’s invasion of Ukraine earlier this year, but also because of the longer term disruption to business caused by two years of the Covid-19 pandemic….
At least that’s the ‘official analysis’ of the causes of the cost of living crisis by the government in this recent report: ‘Rising Cost of Living in the UK‘ but while it’s hard to deny the fact that prices of basic goods and services are rising, some sociological perspectives may well go a little deeper than this in their analysis of the causes of this crisis, while others fail to explain its existence altogether…
Globalisation… and the declining relevance of Nation States…
EVEN if we look deeper at the cost of living crisis than official lines of analysis, it is still the case that global events are affecting Britain here.
Britain has very little control over the global forces that are influencing rising prices.
Moreover the British Government seems incapable of doing anything to help people. This of course is because we have a neoliberal government in power who believe in helping people as little as possible, especially the poor but even if we had a more left wing government in power it wouldn’t be able to do very much to soften the blows of the increasing cost of living other than taking on more debt by bailing people out.
This seems to be a case of Nation States being too small to deal with global problems as Anthony Giddens has pointed out in the past.
Marxism applied to the rising cost of living….
As with many ‘applications’ of ‘Marxism’ I’m applying some Marxist concepts here in a broad sense!
Most obviously Marxists would remind us that this cost of living crisis is affecting the poorest MORE than the richest – the top 10% will feel the effects of the crisis much less than the bottom 10%.
And for the bottom 10% of households by income a 10% immediate increase in the cost of living (NB it’s not just energy and food, rents have also gone up) really is a matter of choosing between ‘eating or heating’.
And Marxists would go deeper than this – reminding us that a crisis such as this was only a matter of time because Capitalism is ultimately doomed to failure. Even without the Pandemic and the War in Ukraine this rising cost of living affecting the poor more than the rich would have happened eventually, or Capitalism would have had some other ind of crisis which resulted in recession and more inequality.
In a world of finite resources and increasing population, with more developing countries developing large middle classes (such as India) this simply pushes the prices of everything up – labour, goods, resources, everything is more expensive – eventually the exploitation of the poor that cheap consumer items and food and energy are based on must come to an end.
At some point we have to start thinking about how we live in a post-capitalist world according to Marxists.
‘Micro Perspectives’ applied to the Cost of Living Crisis
This is an interesting article from the Conversation which argues that the government needs to measure poverty depth more accurately in order to effectively tackle the cost of living crisis.
It points out that not all people living in poverty face the same challenges – for example life tends to be harder for people with children rather than single people.
It also points out that government help needs to be more targeted on those that need it most – so far only 1 in 3 pounds of relief money has gone to the poorest 50% of households.
Perspectives which might struggle here..
Functionalism would struggle here, this is just dysfunctional! And clearly people aren’t all in this together!
And PostModernism – there’s nothing hyperreal about this, it’s very REAL, about energy and food prices costing enough and people going cold and hungry.
Although maybe IF people are living in hypereality this could help get them through – maybe the government jus needs to subsidise people’s Netflix subscriptions…?
Relevance to A-Level Sociology
This topic is most likely to be useful in the Theory part of the theory and methods exam – it is a contemporary event that can be used to illustrate understanding of sociological concepts and perspectives.
The latest research from the Nuffield Foundation has found that 31% of children in the United Kingdom are living in relative poverty in 2021.
The percentage rises to 36% for children under five years old.
The rates of child poverty have been increasing on average for the last five years.
Child Poverty and Ethnicity
There are some large differences by ethnic group, with Bangladeshi Households having the highest child poverty rates, more than twice the national average, and Indian families having the lowest.
Family type and Child Poverty
It’s probably no surprise that single parent families have the highest rates of child poverty, with child poverty rates of 60%.
Defining and Measuring Relative Poverty
The Nuffield Foundation collects its data on poverty from the Households Below Average Income statistics, which define relative poverty as household income below 60% of median income after housing costs.
The relative poverty figures are then adjusted for family size, which gives us the following amounts of income per week in 2021:
£248 or less a week for a lone parent with one child.
£305 or less a week for a lone parent with two children.
£342 or less a week for a couple with one child.
£399 or less a week for a couple with two children.
Neoliberal policies in America over the last 30 years have led to massive economic inequalities.
Policies such of tax cuts for the rich and restrictions in welfare spending mean that now even working people on relatively high incomes cannot afford rent in some of the more expensive areas of America, such as California.
As a result, we have a situation where hundreds of thousands of in-work Americans are forced to live in their vehicles in parking lots, as the documentary below explores.
The documentary starts with the case study of one woman who works as a carer and a cleaner and used to live in a very nice house with her husband in California.
The relationship broke down, and she preferred to leave the house and him behind, but her income of $1800 a year meant she simply couldn’t afford to rent anything in her local area, and so she chose to live in her car instead.
She parks in a free parking lot where a charity has provided water, toilets and an outdoor kitchen for use, and it’s most interesting to note that it’s not the State funding this, but charities.
We see a lot of other people in the same situation – working, but living in their vehicles.
Another guy, aged 53, used to work as a computer engineer, working 50 hours a week earning $7000 a month ($80K a year), but he had a burn out and then some heart problems and after 6 months of unemployment benefit and then nothing he burnt through all of his savings and eventually couldn’t afford to live in an apartment anymore.
He now sleeps in the driving seat of his car (which looks very uncomfortable) and does temporary work to try and get back on track.
Homelessness in Richmond, Virginia
Virginia has one of the highest homeless rates in America and this section of the video starts off with a clip of local police evicting a tenant who is behind with the rent at gun point. Entering with guns drawn is standard, the tenant is actually half way through packing and willing to go.
In Virginia, if you’re only five days behind with payment you can have a late payment order made agains you, and you then have a week to pay, and then be evicted and rendered homeless immediately.
We now get to see a guy who has been living in a motel room for 2 years at the cost of $1300 a month, sharing with his partner. He cannot rent because of his past late payment notices – the State keeps a public database of late payments which landlords can search and they tend not to rent out to people with a history of bad debt.
(It’s quite interesting to compare this to the case in the UK, where we seem to have the other extreme, as evidenced in the ‘Nightmare Tenant’s type programmes – where tenants seem to have too many legal rights to stay put while the landlord just soaks up their debt!)
Poverty in the Apalachians
The documentary now moves away from homelessness in cities and focus on poverty in rural America, heading to the Apalachians. It’s often said that the American Dream got lost somewhere along the way in Apalachia.
Apalachia is home to mainly white working class Americans, 80% of whom voted for Trump, and support seems to be unwavering despite the fact that life hasn’t got better for them under his administration.
We witness a family of five who are on benefits and receive around 1200 EU a month to live off (which I think includes food stamps) – this involves the parents eating only one meal a day at the end of the month. They rely on a free food for kids meal truck that hand out food to children in the area.
Lindon B Johnson created food stamps as part of his war on poverty, and to this day 40 million U.S. Citizens still receive them.
We also get to see a Veteran who is retired on 700 EU a month and receives about 650 EU in food stamps, to feed her, her niece and her three children.
Of course they’re all overweight.
Once a month a team of Doctors provides free medical check ups – many people here, like around 20 million Americans, have no medical insurance. The service is very popular! It’s not just Doctors, it’s also dentists.
The scene looks like something out of a war zone – a triage centre.
A more extensive welfare state would help these people
This video will challenge your stereotypes about homeless people – these are all people who are hardworking and want to get ahead but just had bad luck in life which set them on the path to homelessness.
The State in America offers very little assistance to such people – and the fates of these individuals seem to be a good argument for having a more extensive welfare state like we do in Britain which offers support such as free health care and housing benefit for longer periods.
A more socialist solution would simply be to have more state housing – designated not for profit housing in which people can stay, even have it subsidised at cost maybe?!?
Los Angeles – the Homeless Capital of the United States
In the last few years the number of homeless in Los Angeles have risen from 33 000 to 59 000
Here we get to see Elvis, a guy who has a plan to combat the problem of homelessness. He gave up his job (he lives off his partner) and helps those less fortunate.
He builds small wooden cabins which cost $1000 (paid for by donations) – they have window locks and a solar panel to power an alarm and a light – they basically allow people to get a secure night’s sleep.
However, they are illegal as the mayor has forbidden him to put them on the sidewalks of the streets, but Elvis carries on regardless.
We get to see a scene where Elvis delivers a cabin to a couple sleeping on the streets, an upset resident calls the police and there is a ‘remove or destroy order’ put on the cabin. They do manage to find a spot for it on private land, but that’s the way it goes in Los Angeles!
The Being Homeless Role Play in Waco Texas
The video finishes with a project in Waco, Texas. Once a month, people come to act out what its like to be homeless for 24 hours – to give them a feel for the reality.
Relevance to A-level sociology
This documentary should be of interest to any student studying the Global Development option – it’s a good illustration of the level of inequality in the United States, one of the richest countries on earth, and shows that even very wealthy countries have pockets of grim poverty and social problems such as homelessness.
Find out more….
The story of how the Los Angeles authorities have prevented Elvis from donating tiny homes is pretty depressing – an example of the State actually preventing a DIY solution to poverty.
Summary of a documentary on global inequalities and waste
This excellent 2018 documentary gives us a rare insight into the daily working lives of two men living in poverty, both making a living through trash, one in Kenya and the other in the United States.
It’s a really useful resource for gaining an insight into what the lived experience of poverty is like in these two very different countries, and for highlighting the extent of global inequalities.
Most of the documentary focuses on two men, and we get to hear a lot from them: details of their lives and their thoughts on poverty and inequality and what they would do to help overcome the problems of inequality.
We also here from a few experts and other people, but these take on a supporting role to the two main proponents (which is unusual for documentaries like this, but also welcome!
This is an excellent video to use to teach Global Development in A-level sociology, personally I would use it in the introductory lesson to the module.
Below i provide a brief summary of some of the key points of this documentary:
Sorting trash in Kenyan slum
After a brief introduction we get to see the first part the day of one guy in Kenya who works in waste management.
He gets up at 4.00 a.m and then spends several hours sorting through trash which is delivered from the nearby affluent suburbs and shopping areas. He sorts out food for his pigs and separates out any useful items which he can sell on.
There are a lot of people working sorting waste, many of them there because they have no other option. Many of them also eat waste food they find there.
Recycling cans in New York
The video now hops over to America where it follows another guy who also gets up at 4.00 a.m. to collect cans and bottles, which he then sorts to sell – there’s a good market in recycled containers it seams in New York – he can make $75 a day doing this.
We also get an insight into his life history – he used to be homeless, and he reminds us that many Americans are just one pay check away from falling into a similar situation.
Back in the slum
In this third section we see the guy in Kenya sorting out some of the cartons he’s found at the dump – he gets someone else to wash them and then he sells them on, making a daily income of $3-4 which is enough for him to feed his family, and lifts him above Kenya’s formal poverty line.
The U.S ‘Cultural Waste and Recycling Centres’
Back in the United States – we’re taken to a recycling centre, a community initiative that gives ‘canners’ support in their recycling endeavours – which plays a crucial part in helping them stay resilient.
The video also gets a bit more analytical at this point – there are 600 billionaires in the United States, but 40 million Americans live in poverty. But poverty is much worse in Kenya – it takes the average Kenyan 20 years to earn the annual salary of the average American.
There’s also a short interview with an anthropologist who reminds us that waste is cultural – a lot of things are only trash because we label them as such – and we take a trip to one guy’s museum of trash to drive the point home – he’s got thousands of dollars worth of perfectly good stuff he’s collected from what other people have thrown away!
Reflecting on Inequality
The documentary now highlights inequalities in the two countries – by taking a trip to the mall in Kenya – one gets the impression that the government there is investing more in malls for the wealth than in education and health for the poor.
In America we visit a guy who makes art from trash – one piece (which sold for a small fortune) adorns the wall of the one the most expensive apartments in New York – how’s that for irony.
in this section the two main men in the video give their views on inequality – both seem quite wise – neither think inequality is a good thing and would use our financial resources to give more enabling support to those in poverty, a leg up if you like to better help them help themselves.
Why do you think the video focuses on trash as a means of exploring inequality?
Have these two men found an effective solution (sorting and selling trash) to lift themselves out of poverty?
Do you agree with the two men in this video. Should our global resources be used to help the poor?
Whether or not we regard Poverty as a social problem depends on:
how we define and measure ‘poverty’
the extent to which we think individuals are responsible for their own poverty
our perspective on what we think the consequences of other people’s poverty will be for society as a whole
Whether we ‘care less’ about other people’s poverty.
In this post I’m going to focus on one definition of poverty: ‘destitution’, as defined by the Joseph Rowntree Foundation (source below)
Is destitution problem in the UK?
The JRF defines destitution as when an individual cannot afford the basic material essentials which are necessary to leading a secure life. These essentials include housing, food, weather appropriate clothing and footwear, heating, electricity and basic toiletries.
According to the Joseph Rowntree Foundation, 1.5 million people in the UK were in ‘destitute’ at some point in 2017, the latest figures available.
It’s worth noting briefly that nearly everyone who was (and probably is currently) destitute was either homeless or in temporary or sheltered accommodation.
Destitution in the UK is a social problem…
If you believe that everyone has the right to the basic material necessities of life, then you’d probably regard the fact of such a huge number of people being destitute as a social problem. This certainly seems to be the view of those at the Joseph Rowntree Foundation.
If you watch the video below in which the JRF define destitution there are lots of references to how it’s not acceptable for people to be destitute today.
If you’re the kind of person that’s upset by other people’s suffering, then you’d probably also regard this number of people as being destitute as a social problem – it doesn’t take that much empathy to realise that the state of destitution is extremely unpleasant.
Not only can being destitute involve being hungry and cold and being excluded from many aspects of social life (because you’ve got no money!), it can also mean living in a state of anxiety over the future if you can’t afford to pay the rent, and maybe depression that your situation has no end in sight.
Destitution today might also be the breeding ground for future problems for individuals and society – a hungry child not concentrating in school will get lower educational outcomes and be less employable in the future; someone living in a cold damp house now is more likely to develop long term chronic health problems – both situations which could mean those people being a long term drain on the nation’s resources in the future.
A further reason you might regard destitution as a problem is because of the non-necessity of it! We clearly have the resources in the UK to ensure that every single individual at least has the basic necessities of life, and yet there are 1.5 million people who lead lives so insecure that they’re not having their basic needs met!
People are probably more likely to think destitution is a problem if the reasons for it are not the fault of the individuals experiencing it – if they have fallen into destitution because of ill-health, a relationship breakdown, abuse, losing a job, or even something as basic as a high cost of living (rent, bills etc.). In such situations, maybe it is desirable that the benefits system kicks in and acts as a safety net.
The extremes of destitution existing alongside extremes of wealth might bother some people because of the social injustice of it, especially if they believe that destitution exists because of the means whereby the rich have got wealthy.
Finally, destitution might well lead to crime and social unrest. If people are hungry they might turn to crime to feed themselves, and if they collectively come to perceive their situation as one that is not fair or just, social unrest may be the result.
So it would seem that there several reasons, emotional and rational for why you might perceive destitution as a social problem!
Destitution in the UK is NOT a social problem…
Firstly, if you’re being hard-nosed about it you might point out that 1.5 million people is not that many – it’s only 2.5% of the population. And according to the JRF 2018 report into destitution, this number is declining.
The definition/ measurement of destitution used by JRF is quite ‘soft’ – someone only had to go without two of those basic needs above for a month in 2017 and they were counted in the statistics. You might think it’s not that bad going hungry for one month in a year, it’s not starvation, it’s unlikely to lead to long term malnutrition.
Then there’s the fact that you simply might not believe in individual rights. You might believe that individuals are not ‘entitled’ to anything, and if they fall on hard times it’s tough luck.
Or you might believe in radical individual responsibility and think that if individuals are destitute, for whatever reason, it is their job to lift themselves out of it, in which case the problem of destitution isn’t a social problem, it’s an individual problem, although this particular view point is quite anti-sociological, in fact it’s possibly the very opposite of the sociological imagination.
Even if you’re more left-wing and believe that the individual is NOT entirely responsible for their own poverty, but rather it’s something to do with the system, then it’s not poverty as such that’s ‘the real problem’ – it’s whatever you believe has caused poverty.
Finally, even if there are identifiable correlations between destitution and crime/ social unrest, it might be that with more measures of control (e.g. harsher penalties, more police, as right realists suggest) we might still be able to mitigate the worst effects of destitution.
Whether you think destitution in the UK is a social problem very much depends on your values.
If you’re leaning towards the left you’re more likely to believe that povert has social causes and that more equality is good, so are more likely to perceive destitution as a social problem with social solutions.
If you’re more right leaning, you’re more likely to frame destitution as an individual problem, have less of a problem with higher levels of inequality and think that individuals and society can and should adapt to cope with a certain degree of destitution, which individuals largely bring on themselves.
Finally, whether you think it’s a problem or not depends on your definition and measurement of it, and TBH with the soft definition used by the JRF I’m actually finding myself leaning to the view that destitution in the UK is NOT a serious social problem.
Local Councils in London are increasingly resorting to moving poor homeless families out of London, because they can’t afford to meet their housing needs within London. In most cases they’re being moved to Kent and Essex, but in sometimes moves are made much further afield:
What the map above shows is the literal relocation of the poor – shifting poverty out of London and into poorer parts of the country. It’s the real life version of what happened at the end of ‘People Just do Nothing’.
The main cause: the high price of housing in the capital, fuelled by 30 years of cheap mortgages and foreign speculative investment on property in London.
The negative consequences for the poor
At the very least these families are being removed from all of their local social connections and having their children’s schooling disrupted, but in some cases they suffer much worse: cramped housing conditions and being housed in the same block of flats as ex criminals, as the recent case study of Terminus House suggests….
Various London councils have housed hundreds of poor recently-made homeless Londoners at Terminus House in Harlow, Essex, several miles outside of London.
The building is a 1960s 14 story, former office block converted into flats and run by the private company Caridon Property since April 2018.
The problem is that the complex is also home to several ex-offenders, including at least 25 people recently released from prison, and it’s something of a crime hot-spot, with high levels of anti-social behaviour, burglary and criminal damage.
Police figures show that in the first 10 months after people moved in, crime within Terminus House itself rose by 45%, and within by 20% within a 500m radius of the property.
Relevance to A-level sociology
This strikes me as a great example of how the poor in London are the victims of local council policies (not defined as illegal of course) – they get moved out from their local areas, and then are more likely to become the victims of crime. It illustrates perfectly how the poor are more likely to be victims of social injustice and crime than the rich!
The easy answer is to say around 22% of the population, roughly 14 million people. The long answer starts with the sentence ‘it depends on how you define and measure poverty’, in which case you get various different statistics on the poverty rate.
22% of the UK population are in poverty, equivalent to 14.2 million people: 8.4 million working-age adults; 4.5 million children; and 1.4 million pension age adults. Source: The Social Metrics Foundation, 2018.
1% of the total UK population (7. 7 million people) live in persistent poverty. Source: The Social Metrics Foundation, 2018.
This definition of poverty is broader than any previous definition because:
It takes account of all material resources not just incomes. For instance, this means including an assessment of the available assets that families have; •
It takes into accounts the inescapable costs that some families face, which make them more likely than others to experience poverty, such as the extra costs of disability, and costs of childcare and rental and mortgage costs; •
It automatically defines anyone who is ‘sleeping rough’ as being in poverty.
However, it also sets the relative poverty line at 55% of median income rather than 60^ of median income (as the government has done for many years), seemingly because to keep it at 60% while making all of the other changes above would put too many people in poverty?!? See page 63 of the report for more details:
According to the Government’s own data:
16% of UK households were in relative low income households (before housing costs)
22% of UK households were in relative low income households (after housing costs).
Relative low income households have an income of less than 60% of median household income (equivalised), which is equivalent to £296 per week (or approximately £1000 per month). Source: Households Below Average Income, published March 2018.
7.3% of the UK population (4.6 million people) are in persistent poverty. This study defines ‘persistent poverty as being in a relative low income household (using the BHAI definition of this) consistently for 3 years. Source: Persistent Poverty in the UK and the EU: 2015.
Which of these is the most valid measurement of poverty?
You’ll notice that there’s some different between these figures, especially between the Social Metric Commissions’ persistent poverty rate and the ONS’ poverty rate – 12% compared to 7%, so it really matters which of these is the most valid!
Given that the Social Metrics Commission’s definition was agreed by a large panel of people, which included government representation, I’m going to say the SMC’s definition/ measurement is the most valid.
22% of the UK population, or 13.9 million people live in poverty in the UK (2016). Poverty rates are higher for lone parent households (46%), disabled households (34), and rates also vary significantly by ethnicity (e.g. the Bangladeshi poverty rate = 50%).
In brief, 22% of the UK population, or 13.9 million people live in poverty in the UK (2016). Poverty rates are higher for lone parent households (46%), disabled households (34), and rates also vary significantly by ethnicity (e.g. the Bangladeshi poverty rate = 50%).
Below is a summary of the latest statistics on the characteristics of those living in poverty in the UK. NB These are the latest stats I could find which have been comprehensively analysed by the Joseph Rowntree Foundation, based on their 2017: Poverty in the UK report.
If you can’t see the above chart online (it’s designed to be downloaded and printed off in A3) the it’s all replicated below!
Basic Poverty in the UK Statistics
A total of 13.9 million people lived in poverty in the UK in 2015-16, or 22% of people live below the poverty line, 30% children, and 18% of pensioners. However, there is significant variation between the proportion of working age adults, pensioners and children living in poverty.
What is Poverty?
Relative poverty: the stats in the JRF report summarised here mainly show ‘relative poverty’: when a family has an income of less than 60% of median income for their family type, after housing costs.
A related measure is persistent poverty which is when a person is currently in poverty and has been in poverty for at least two of the three preceding years.
For more details for different ways of defining and measuring poverty please see this post: What is poverty?
Poverty rates by household type
46% of lone parent households are in poverty, twice as many as all other household types.
The ‘poverty line’ varies by household type:
Family type £ per week, equivalised,
Couple with no children = £248
Single with no children = £144
Couple with two children* = £401
Single with two children* = £297
*aged 5 to 14
Poverty varies most significantly by disability
In 2016 34% of working-age adults in families with disabled members lived in poverty, compared with 17% of those who did not.
Poverty also varies by ethnicity
Approx. 2016 rates for working age adults Bangladeshi – 50%, Pakistani – 45%, Black British 37%, White – 19%.
Find out more…
There are other variations in poverty highlighted by the JRF report (link above), I’ve just selected the main ‘in focus’ trends as things stand in 2017.
NB on the ‘data lag’ – that’s just one of the problems of Official Statistics more generally – most of the data above has been analysed from various different types of government stats, which are already a year out of data before the ONS publishes them, then you have wait further for the JRF summary. If you want the 2018 stats, you’ll just have to wait til 2019!
If you like this sort of thing, then you might also like my previous post on ‘Poverty Trends’ in the UK, which looks at how poverty rates changed between 1996 and 2016.
How do we explain the long term decline in UK Poverty rate, and its more recent increase?
The UK has seen significant falls in poverty over the last 20 years, HOWEVER, this progress is now at risk of reversing as poverty rates have been increasing in recent years. This blog posts summarizes the 20 year trend in UK Poverty according to the Joseph Rowntree Foundation’s 2017 Poverty Report. Specifically it looks at:
The overall 20 year trend in UK poverty
poverty among pensioners and children
Three drivers of the reduction in poverty rates
Three threats to the continued reduction in poverty rates
NB I’m using the same information from the report, but I’ve changed the order in which it’s reported and summarized it down further. Personally I think my version is much more immediately accessible to your ‘non-expert’: IMO the ‘JRF have a tendency to ‘over-report’ reams of nuanced data, and the overall picture just gets lost. The detail’s important if you’re a policy wonk, but probably going to get lost on the average, interested member of the general public.
Before reading this post you might like to check out my ‘what is poverty?‘ post which covers the basic definition of some of the terms used below.
The overall 20 year trend in UK poverty….the fall and rise of UK poverty rates
20 years ago, in 1996, nearly a quarter (24%) of the UK’s population lived in poverty. By 2004, this had fallen to one in five (20%) of the population. However, by 2016, the proportion had risen slightly to 22%.
*Relative poverty is when a family has an income of less than 60% of median income for their family type, after housing costs.
Children and pensioners living in poverty
As the chart above clearly shows, the biggest success stories in the long term reduction in poverty over the last 20 years are the numbers of pensioners who have been taken out of poverty and (to a lesser extent) the number of children.. As the chart above shows:
In 1995, 28% of pensioners lived in poverty, falling to 13% in 2012, but rising to 16% by 2016.
In 1995, a third of children lived in poverty, falling to 27% in 2012, but rising to 30% in 2016
However, during that time the proportion of working age couples without children in poverty actually grew slightly, from 16% to 18%.
Factors correlated with falling poverty rates
The report notes three main factors which are mainly responsible for this long term overall decline in poverty:
Rising employment, linked with higher wages due to the minimum wage, and better education.
Increased support through benefits, especially the increase in the state pension age, but also out of work benefits for working age people with children
Housing benefit and increased home ownership containing the impact of rising rents.
Factors explaining the long term decrease of UK Poverty in more depth
It seems that the main drivers behind the long-term decrease in poverty in the UK are the ‘positive’ economic factors such as improvements in the employment rate, pay and conditions, rather than increases to benefits.
Below I select what appear to be the five most import factors from the report which explain the long term decrease in poverty.
The increase in the state pension
The most significant reduction in poverty has been achieved with pensioners, and according to the JRF report, the main reason for this was a one off increase in the state pension at the beginning of the century:
NB – there is a lot of variation in pensioner income, which I may explore in a future post…
The employment rate has increase from around 71% in 1996 to around 75% in 2016…
NB – while you are statistically more likely to be in poverty if you’re not in-work, being employed it itself is not sufficient to avoid being in poverty. Both the introduction of the minimum wage, and changes to in work benefits for lone parents have been essential to making sure that a higher proportion of people in employment are also not officially in poverty. While work today is more likely to lift you out of poverty than in 1996, it remains the case that a large percentage of those in poverty are in-work (typically in part-time jobs).
Earnings are up for people with all levels of qualifications…
Obviously higher earnings are more likely to lift people out of poverty, HOWEVER, at the bottom end of the income earning scale, and especially for those with children and in part-time jobs, the increasing cost of living, especially rent (but also childcare and even food and utilities) has negated much of the above increase in wages, hence why government support in the form of child tax credits and housing benefit remains important.
The number of people with degrees has nearly trebled in this period: from around 12% of the UK population to over 30%
Those with degrees earn approximately twice the amount of those with no qualifications, so it would seem that New Labour’s focus on ‘education, education, education‘, and their push to get more people into higher education has had a positive impact in poverty reduction. However, with the introduction of tuition fees and with increasing competition for highly skilled jobs coming from abroad, it’s not clear that this trend (of more and more people getting degrees) is set to continue.
The introduction of the national minimum wage has resulted in a 46% relative pay increase for the poorest 10%, compared to a 40% median national increase
Both the introduction of the minimum wage and its subsequent increases seem to have been one of the most important factors in tackling in-work poverty. However, even with the minimum wage, a possible future barrier to further poverty reduction lies in the growth of precarious jobs leading to ‘underemployment’ – where people get too few hours to earn a decent living. For more on this, see my summary of the RSA’s report on ‘Future Work in the UK‘.
The increase in out of work benefits for people with children
Basically, there has a been a very slight long-term increase in out of work benefits for people with children, who are now slightly better off than 20 years ago, while poor people without children have seen no change, or are slightly worse off.
I guess this leads to an overall reduction in the poverty rate simply because there are more people per family household rather than just couple or single person household.
You can see from the above chart, that lone parents claiming JSA and child benefits were briefly lifted to 60% of median income (just on the poverty line) – sufficient to take them out of poverty, however, you can also see that benefits are again being cut back, so we can probably expect poverty rates to increase again in the future!
And one factor which doesn’t seem to explain the overall reduction in poverty… changes to in-work benefits…
With the exception of single parents who are better off over a twenty year period, every other household type seems to be worse off! Thus I can’t see how this variable would explain the long term decrease in UK poverty.
Potential barriers to further reductions in poverty
All three of the main drivers of poverty reduction mentioned above are now under question:
The continued rise in employment is no longer reducing poverty.
State support for low-income families is falling in real terms, and negates the gains made by increasing employment and wages.
Rising rents, less help for low-income renters and falling home ownership leave more people struggling to meet the cost of housing.
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