Hard work, hard times: the lived experience of in-work poverty

In July last year, a Scottish Government report revealed that 52% of adults in Scotland living in poverty were from households where at least one person was working; a figure that has been on the rise over the last two decades. It is little surprise then that ‘in-work poverty’, as it is commonly termed, has been the subject of considerable recent discussion and debate. What is surprising is the lack of primary research undertaken on the topic to date. Granted, a number of commentators have sought to analyse the reasons for the phenomenon or made recommendations as to how it might best be tackled, but there has been comparatively little work looking in detail at the experiences of those in the situation that might provide for genuinely evidence-based solutions.

Mindful of this, the Glasgow Community Planning Partnership (CPP) commissioned Ipsos Scotland to interview a sample of the city’s affected residents with a view to identifying the range, scale and depth of issues that they were facing. The findings were eye-opening and confirmed that having a job is no longer a guarantee of avoiding poverty.

Virtually all of those we spoke with were experiencing levels of hardship more often associated with worklessness. It was common for them to sum up their day-to-day existence as “a struggle” or to make such comments as “every penny is accounted for every month”. Many participants went further, saying that they were simply not managing to make ends meet and had effectively reached crisis point. Irrespective of the severity of their situations, it was clear that the combined cost of housing, fuel and food bore heavily on them.
Indeed, they were often faced with difficult trade-offs between, for example, paying their rent on time and heating their homes, or topping up their electricity meters and buying food. Several of those we spoke with described how, towards the end of the month especially, they routinely had to borrow money to pay for food or resort to eating only discounted or very basic produce such as dry pasta and toast.

It should come as no surprise then that very few of the participants had savings that they could fall back on, leaving them vulnerable to the effects of unexpected financial shocks, like an essential household repair, and further reliant on borrowing as a means of getting by. Almost all had at least some outstanding debt. Sums citied typically ranged between c£3,000 and c£10,000 though those in the greatest difficulties were often reluctant to disclosure the full extent of their borrowing.

In term of other impacts of in-work poverty, the majority of those we spoke with said that they (and in some cases their partner) were suffering from stress and/or depression as a direct result of the strain they were under. A similar proportion referred to tensions or relationship difficulties that had arisen in their households over money.

So, what did the research tell us about strategies for tacking in-work poverty? First and most fundamentally, it reinforced calls to maximise incomes through the payment of a Living Wage and other positive employment practices. Most of those we spoke with were earning around the level of the National Minimum Wage; sometimes in zero-hours contracts where their hours (and thus incomes) were uncertain from week to week.

Secondly, it confirmed the need for measures to ensure that people are progressively better off in work than they would be on benefits – in other words, that it always pays to work. Participants working part time often commented that it was not worth their while increasing their hours because the extra income they would receive would effectively be cancelled out by loss of Working Tax Credit. The new system of Universal Credit has been designed to address such instances but commentators have argued that more still needs to be done. Lawton and Thompson, writing for the Rowntree Foundation , for example, have called for a second-earner disregard in the new system of Universal Credit which would allow a second earner a certain income before Universal Credit is withdrawn.

Thirdly, the research underscored the need for increased provision of affordable childcare. Several of the parents we interviewed were working part time because they could not afford full-time childcare: one commented that care for his three children would cost more than he and his wife earned. In the current economic climate a move towards cheap universal provision is unlikely, which has prompted Bell to argue that, in the meantime, consideration should be given to expanding before and after school provision as this may be cheaper than creating additional childcare places for younger children.

Finally, the research highlighted a need to ensure that people are aware of the range of benefits and other forms of financial assistance available to them – including Discretionary Housing Payments and Crisis Grants – and of local advice and support services; particularly debt advice services. Several participants had approached their local Citizen’s Advice Bureau for debt advice with each describing the experience in very positive terms.

The Glasgow CPP and Poverty Leadership Panel has already begun implementing measures such as those outlined above. If, as seems likely*, the issues we found in the city are replicated elsewhere, other local partnerships would do well to follow suit.

Ipsos’s full report on in-work poverty in Glasgow is available on the Glasgow Community Planning Partnership website.

*Data from the Scottish Household Survey (SHS) suggests that although the rate of in-work poverty in Glasgow is slightly above the Scottish average (at 8% compared with 6%), it is lower or in line with that found in several other local authority areas, including Dundee, Aberdeen and Fife.

The article was published in www.scottishpolicynow.co.uk