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In-work Poverty UK & Northern Ireland 2014 - Tom MacInnes, New Policy Institute

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A presentation from Tom MacInnes at the New Policy Institute (npi) to the NICVA Centre for Economic Empowerment (CEE) conference on Working Poverty, 28 May 2014. The presentation looks at some of the statistics and narratives around poverty in working households in Northern Ireland, drawing some comparisons to the UK. Contains some statistics from the Joseph Rowntree Foundation (JRF) report Monitoring Social Exclusion and Poverty in Northern Ireland (MSEPNI) 2014.

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In-work Poverty UK & Northern Ireland 2014 - Tom MacInnes, New Policy Institute

  1. 1. In work poverty, UK & Northern Ireland 2014
  2. 2. Some definitions • Poverty means lacking the resources to participate in the “norms” of society • But these norms change over time, so how do we capture that? • We use an income measure, based on the median (average) income in the country at that time • If a household’s income (after taxes, including benefits) is below 60% of this median, the household is in poverty • In 2012, this “poverty line” was £128 for a single adult, £264 for a lone parent with two young children • This is measured after housing costs – housing costs are difficult to change week on week, housing benefits can distort incomes
  3. 3. Some more definitions • We measure poverty at the household level – total household income compared to average household income • So we also look at “work” at the household level • A household is “working” if at least one adult is in paid work • So when we say that half of all poverty is “in work”, we mean it is in working families • Not that half of all people in poverty are working
  4. 4. Poverty has increased for all groups in Northern Ireland except pensioners, and increased by more than GB
  5. 5. Both in and out of work poverty have risen in the last 10 years, but in-work rose more
  6. 6. The “risk” of poverty is over one quarter unless all the adults in the household work, and at least one works full time
  7. 7. Poverty by age in Northern Ireland The number of 16-29 year olds in both working and workless poverty has increased over five years. For 30 to 44 year olds and 45 to 59 year olds, the increase has been in working poverty
  8. 8. Since the start of the recession, unemployment and underemployment have risen more in NI than GB
  9. 9. Median pay is lower in NI than GB and has been falling since 2009
  10. 10. Hourly wages for the bottom quarter are also lower, and have also fallen
  11. 11. Complications • Working poor and non working poor aren’t different people – same people at different times. People move in and out of work all the time • Half of all JSA claims made by people who had previously claimed in the last year. 5m people claimed JSA over 2 year period • Not all low paid people are in poverty, and not all people in working poverty are low paid • A living wage would help, but not solve in work poverty - if you receive tax credits, over 70% of any increase is lost in taxes and reduced benefits. This reduces to 65% under Universal Credit
  12. 12. Final thoughts • Tackling in work poverty needs a focus on pay and hours • Increasing the number of “full working” families implies a big increase in employment but also implies other shifts – “full working” is not quite the norm • Implications for services, most obviously childcare but also health, education, transport • Note that these services are not exclusively used by people in poverty – the working poor are the everyman and woman. Improvements for people on low, working incomes will benefit everyone

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