Two thirds of people taking up work in the last year are paid less than the Living Wage according to the Joseph Rowntree Foundation’s new Monitoring Poverty and Social Exclusion 2014 report. Record numbers of working families are now living in poverty – there are more families that are in work living in poverty than in workless households. The report claims that this is due to a massive increase in zero hours contracts, low paid self-employment and part time jobs. Around 1.4 million people are in part-time work because they can’t get a full-time job.
The problem is exacerbated by the lack of affordable social housing, leaving many with no choice but to pay expensive rates in privately rented accommodation, and prices for food, energy and transport, which have risen far beyond the accepted CPI of 30%.
While the UK Government recently boasted that there are record numbers of people in employment, the researchers found that many of those entering employment have done so in poorly paid and insecure work, where families find it increasingly difficult to make ends meet. The Living Wage is now £7.85 per hour outside London, however, the legally enforceable minimum wage stands at just £6.50 an hour. Worryingly, the lowest paid 25% of workers have seen their hourly rate drop 70p for men and 40p for women in real terms since 2008, while average wages for both male and female employees have fallen by £1 and 50p per hour respectively, in real terms, in the same period. Incomes for the bottom 10% have fallen by 8% since 2002/3 and just 20% of those in the lowest paid employment have moved into better paid work over the last decade.
Speaking to the Guardian, Julia Unwin, chief executive of JRF said the report showed a real change in UK society over a relatively short period of time. “We are concerned that the economic recovery we face will still have so many people living in poverty. It is a risk, waste and cost we cannot afford: we will never reach our full economic potential with so many people struggling to make ends meet.