Almost 700,000 people in Wales live in poverty, says report
Study shows 30% of families working part-time live in poverty, compared to 7% for full-time working families
More working families in Wales are now living in poverty compared to the number of out of work families, according to a new report.
The study by the Joseph Rowntree Foundation (JRF), shows almost 700,000 people in Wales live in poverty – nearly a quarter of the population.
Its findings also show the number of those who are working and live in poverty now exceeds the number of those who are not in work. More than 51% of working-age adults and children in poverty are from working families.
The research, by a team at the New Policy Institute (NPI), blames the rise of in-work poverty on underemployment, where people lack the paid work they want, and low pay.
It says 30% of families working part-time live in poverty, compared to 7% for full-time working families. Meanwhile, a quarter of employees earning less than the Living Wage of £7.45 per hour are in poverty, compared to only 3% of those earning more.
The report highlights the regional differences of both in-work and out-of-work poverty across Wales. The West and North West have proportionately high shares of in-work poverty, pointing to greater levels of in-work poverty in rural areas.
The report calls on the governments in Wales and Westminster to focus relentlessly on job creation and not just welfare reform, and to work with public services and employers towards paying a Living Wage.
Policy makers and public services are also urged to ensure poorer families can access essential services – currently, some areas needing the highest levels of medical and social care receive the worst.
Peter Kenway, director at NPI, said: “This report shows there are not enough jobs, not enough hours and not enough pay for people in Wales.
“These are families who are going out to work but still have so little they are living below the poverty line and struggling to make ends meet. Low pay and low hours go hand in hand: job creation is a priority, but this must lead to better pay and more hours to tackle in-work poverty.”
Aleks Collingwood, Policy and Research Manager at JRF, said: “The Welsh Government deserves credit for its Tackling Poverty Action Plan, but it must address low pay as well as low hours.
“Shielding families from further hardship is crucial, but policy makers must also ensure public services meet the needs of those who struggle to access them. Poorer working families may lack time as well as money, so that means making sure they can access things such as childcare and doctor’s surgeries.”
The figures come just a fortnight after research by the House of Commons Library revealed Wales has seen the biggest increase in “underemployment” in Great Britain since the Conservative-Liberal Democrat coalition took the reins of power in 2010.
In a trend which Shadow Welsh Secretary Owen Smith claimed was latest evidence of a “cost of living crisis”, the data showed in the first quarter of 2010 there were around 110,000 Welsh workers wanting to work more hours but this has shot by nearly 2% to 150,000.
And last month the TUC published research suggesting almost half of the rise in employment since 2010 has been in temporary work.
Meanwhile, today’s report points out that because a higher proportion of its working-age population is disabled (24% compared with 20% for England), Wales will be hit harder by the welfare reforms targeted at disabled people.
The idea that disabled people need stronger incentives to enter work is challenged by the report’s finding that disabled people make up four in 10 of those in Wales who want jobs but can’t get them. Being hit by hefty benefit cuts will only increase their hardship in the short term.
Shadow Communities Minister Mark Isherwood said the figures showed a failure to tackle the “deep-rooted” causes of poverty.
“This is shocking, given that economic development is a devolved area and the Welsh Government has invested many hundreds of millions of pounds in tackling poverty and economic regeneration – some from its own budgets plus billions from Europe, targeted particularly at the west and north west of Wales.
“But this report shows that they have proportionately high shares of in-work poverty, particularly in rural areas.
“This is a shocking indictment, again indicating that this money has been to subsidise symptoms of problems rather than tackling their underlying causes. This is 14 years after devolution through years of both boom and bust.”
The Tory AM added: “We have to get down to those deep-rooted causes for people who are in-work poverty and out of work poverty, tackling both multi-generational worklessness but also the issues identified in this report, affecting people who are in work, either underworked or on very low incomes.
“Some matters are clearly un-devolved, issues around the tax and benefits system for example.
“The Joseph Rowntree Foundation however has been producing reports identifying the problem in Wales and more broadly for many years.”
Liberal Democrat social justice spokesman Peter Black said: “It is deeply regrettable that despite 13 years of Wales Labour-led government and tens of millions of pounds of European state aid, Wales remains one of the poorest parts of the United Kingdom and a low wage economy.
“That is why the Liberal Democrats in Government have cut tax for the lowest earners taking 130,000 Welsh workers out of tax altogether and are delivering a £700 tax cut for 1.1 million more.”
Vaughan Gething, Deputy Minister for Tackling Poverty, said: “These figures are not surprising in the current economic climate. Most people want to work rather than live on benefits and will take lower paid or part-time jobs rather than be unemployed.
“We are committed to taking action that helps to lift people into work.
“The Joseph Rowntree Foundation report recognises that we need job creation to defeat poverty.
“This is still the best way to tackle poverty and is a key priority in our refreshed Tackling Poverty Action Plan. No other UK administration has set out a similar commitment for households where nobody works.
“Welfare reform means vulnerable groups are most likely to be hit. This is one of the reasons we are refocusing the work of advice services in Wales.
“Tackling poverty in this environment with a flat economy is extremely challenging but reinforces the need for us to take action.
“Flying Start schemes across Wales are already making a difference to many children and families and is an example of how the way we are spending money is having an impact.
“Poverty has a huge cost to all of us and it’s in everyone’s interests to tackle it.”
One family’s story…
Daren and Carren Howe from Cardigan have six children, aged from two to 15.
Daren, 40, works full-time at Tesco, but said the family only breaks even and would be no worse off on benefits.
“I earn above the minimum wage and am not paid badly but in truth I would be just as well off if I were claiming benefits. My youngest daughter has only just started meithrin (nursery), so my wife will be looking to go back to work soon, even though there’s not a lot about at the moment.
“We have six children and we do get tax credits – working tax and the child tax – but still the stretch is unbelievable with eight of us.
“We have a clapped out old Nissan and that is all we can afford. The whole family doesn’t fit in the car and we would never be able to afford a people carrier so you could say our quality of life isn’t what it should be, we can’t go anywhere as a family together.
“The amount of people that I know who are on benefits and driving around in nice cars is incredible, it can be a bit disheartening at times, and it does make you wonder how such a system came to exist.
“For me it’s about having a work ethic and making sure my children understand that working is important. I certainly wouldn’t be worse off if I wasn’t working.
“We have to pay full rent and full council tax. We do get help with the water rates and we do have tax credits but with a big family, living in a rural area we do need to keep the car on the road and that is also very expensive.
“My employers pay better than many comparable employers but I just feel the whole set up is wrong, where the difference between those who are working and those were not working isn’t that great.
“Carren and I don’t go out at all because we can’t afford to. It was Carren’s birthday yesterday and we couldn’t afford to go out for a meal, there would be no hope of that.
“When you talk about poverty and you look at the whole world it’s hard to think that you live in poverty, we’re not starving, we live, but we certainly don’t have a lavish lifestyle.
“Christmas is always a real struggle but we always have a wonderful time.
“We chose to have six children and know it is our responsibility to pay for their upbringing. When our youngest, Kayleigh, goes to school and Carren goes back to working we won’t be better off.
“We will end up paying more tax and losing our credits, so what will happen is we will be spending less time together and earning exactly the same money, so our quality of life is totally affected.
“If we are both working we should be living a comfortable life but unfortunately that won’t be the case.”