|What future for the workhorses of the welfare revolution?|
Today’s welfare revolution encourages the same attitude. Work and pensions secretary Iain Duncan Smith used the Daily Telegraph to thump home his message that the poor must work harder: 35 hours a week on the minimum wage will lift a family out of poverty, he declared (that’s £212 a week in real money).
His message, reinforced with a speech today, coincided with figures showing that child poverty figures are down. This is not because the poor are getting richer but because ordinary people’s incomes are falling, bringing down the level of median household income (poverty is officially calculated as living below 60% of median household income).
So what does hard work give you? A new report by Oxfam is revealing, and reinforces the points made in Stephen Armstrong’s The Road to Wigan Pier Revisited, reviewed in my last post.
Oxfam says those who are poorest in the UK are facing a ‘perfect storm’ of reduced income, slashed welfare benefits, and rising costs. As an example, the national minimum wage rose by 12.1% between 2007 and 2012. At the same time food prices rose by 30.5%.
The Trussell Trust, which runs the UK’s largest network of food banks, gave food parcels to 128,000 people in 2011. By 2016 it expects the figure to rise to half a million.
Oxfam says six out of ten working age adults living in poverty are within working households, giving the lie to Iain Duncan Smith’s glib ‘get a job’ mantra. The UK has the highest number of zero-hours contracts in Europe – jobs with no guarantee either of work or of income.
It quotes the case of David from East London:
David used to work for his local council, and his wife Catherine works for the local hospital. Over a year ago, David lost his job and, as Catherine’s job is low-paid and their son is struggling to find a job, the family started having trouble making ends meet.
Despite trying his best, David couldn’t find a job, so he turned to taxi driving. Renting his cab costs him £250 per week, and he cannot always find customers on a regular basis, due to the recession. The family cannot miss any more mortgage payments, or their house will be repossessed, so they are having to go without food to keep up with their payments, and haven’t been able to put the heating on all winter. They use gas and electric keys, and when they run out, David goes out to try and pick up a fare, and then comes home to put the money on the key.
The pressure on the couple is mounting and both Catherine and David are now on anti-depressants. David is not entitled to any benefits as his wife works, and the couple’s son is not classified as a dependant any more, even though he cannot provide for himself, as he doesn’t have a job. They have other debts that they can’t pay, and if they decide to go bankrupt, they won’t be able to afford to rent another property or to live in a council property, as they aren’t vulnerable adults.
There are many more stories like these, and many more statistics. If you don’t believe it from Oxfam, check out PriceWaterhouseCoopers’ UK Economic Outlook series. Take this summary from November 2011:
Unemployment, negative housing equity, low wage growth and exposure to public sector cuts have left many households with uncertainty about how they are going to meet their financial obligations in the future. This exposure to financial stress has dampened consumer confidence and held back economic recovery.
The most recent paper, in March this year, is marginally more optimistic. But that was before the latest phase of the Eurozone crisis. PwC predicted such a scenario would increase the likelihood of a double-dip recession, with rising unemployment and falling household incomes.
On this basis, you have to wonder whether we are witnessing the rise of a new generation of Boxers, working harder and harder for rewards that are more and more distant. If this happens, all the platitudes about making work pay start to evaporate. Iain Duncan Smith wouldn’t be the first reformer whose actions had the opposite effects to those intended.