Majority of children in absolute poverty have working parent, figures show

By The Press Association19th July 2016News EnglandAusterity, Benefits, Child Poverty, Child Protection, News England, Poverty / Austerity, Welfare / Benefits

Two-thirds of children classified as living in “absolute poverty” now have at least one parent who is in work, according to new research.

The Institute for Fiscal Studies (IFS) said a study of the official household below average income figures showed the problems of low income were increasingly associated with working households.

With more people in work in the UK than ever before, the IFS said the proportion of children living in a household where there was no one working had fallen from nearly one-in-four in 1994-95 to fewer than one-in-six in 2014-15.

Only a third of children below the Government’s absolute poverty line were now living in households where no one was working – with two-thirds classified as poor despite the fact that at least one of their parents was in paid employment.

IFS director Robert Joyce, a co-author of the study, said: “Tackling low income is increasingly about tackling the problems faced by low-earning working households.

“In the short term this would be aided by a continued recovery in the number of hours worked by those on low wages or by more second earners entering work.

“Ultimately substantial progress will depend crucially on economic policies that push up productivity. Economic uncertainty following the Brexit vote will only serve to make these challenges all the tougher.”

While the IFS said it was “good news” that employment income now accounted to half the income of the poorest fifth of households – up from less than a third 20 years ago – it meant they were more vulnerable to any downturn in the labour market.

It found that while strong employment growth, with increasing numbers of second earners, had mainly boosted the income of poorer households while weak pay growth had held back the incomes of the better off, with the result that inequality had been held down in recent years.

While the overall median income level has now finally risen 2% above the level it was prior to the global financial crash of 2008, for adults aged 31 to 59 it was still at the pre-crisis level, while for those aged 22 to 30 it was still 7% down.

“It is highly unusual to see no growth in working age incomes over a seven-year period,” the IFS said.

The report said that in some key respects middle income families with children more closely resembled poor families in the past, with half now renters rather than owner occupiers.

The earnings of mothers were increasingly important for households with children, with women’s earnings in middle income families now accounting for more than a quarter of household income compared to less than a fifth 20 years ago. Among the poorest fifth it has doubled from 7% to 15%.

Work and Pensions Secretary Damian Green said the report showed the Government was making progress in building “a Britain that works for everyone”.

“We now have record numbers of people in work, falling unemployment and wages rising faster than inflation,” he said.

“But we need to go further, which is why we have committed to increase the national living wage to benefit the poorest in society, we are taking the lowest paid out of income tax and our welfare reforms are ensuring it pays to be in work.”