Is there any point working? Child poverty and parental employment

Most children living in poverty are not from workless households, writes the Guardian: “The number of children of working parents who are living in poverty in the UK has risen to an unprecedented 2.1 million [...] accounting for 58% of the total.”

This is one of those meaningless figures which come up again and again in the poverty debate, with only the second digit changing from year to year. It is surely not the intention of the authors writing the underlying reports, but once distilled by the poverty advocacy community and certain parts of the media, the message is always: work is not a route out of poverty. Forget work. Just increase benefits unconditionally.

A crude figure of that kind would have made some sense one or two generations ago, when most people were either in work or not. What the Guardian’s 58%-figure reflects is simply the fact that since 1999 tax credit policies have been moderately successful at propelling many formerly workless parents into minor employment. The most common working hours pattern among them is a working week of 16 hours – the threshold at which parents qualify for Working Tax Credit. Far from showing that work is pointless, the figure shows that working two days a week in a low-paid job is usually not enough to raise people above the relative poverty line. Not that surprising, is it?

In addition, the figure includes about 0.4m children living with self-employed parents. For the self-employed, income poverty figures mean next to nothing because their incomes are naturally volatile.

To reveal some meaningful information, poverty figures have to be disaggregated a bit further by occupational status. They should also approximate living standards by consumption instead of income, as the index of Material Deprivation does. It then shows that child poverty clearly decreases with the degree of the parents’ labour market attachment.     

Employment status of parents

Material Deprivation rate

Couple; both in full-time work

1%

Couple; one in full-time, one in part-time work

3%

Single parent in full-time work

6%

Couple; self-employed

6%

Couple; one in full-time work, one not working

13%

TOTAL

17%

Single-parent in part-time work

17%

Couple; at least one in part-time work

34%

Single parent; not working

54%

Couple; both not working

62%

 

(based on data from the ONS and the DWP)

Does that mean that increasing employment among the poor is sufficient to make poverty disappear? No. But it does mean that as long as employment among the disadvantaged does not increase, throwing more and more money at the problem will not make it go away.

Very interesting figures that deserve much wider dissemination.

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