We must make work pay if we’re to improve living standards

Low pay and precarious employment are making work a less reliable route out of poverty. Stephen Armstrong, author of The New Poverty, looks at the situation for people struggling to get by in the UK today.

The statistics published by the End Child Poverty coalition last week were shocking enough – more than half of all children in the UK’s very poorest areas are growing up in poverty. This will damage their health, their education, their future job prospects and their lifespan. Where children have a greater chance of growing up in poverty than being in a family above the breadline, the system is stacked against them. In sheer numbers terms, the chances of escaping their situation is decreasing every year.

The Government’s response was oddly ill-informed – a spokesperson told the Guardian: “The best route out of poverty is through employment.” And yet this is increasingly untrue. Around two-thirds of British children living in poverty have at least one parent in work.

Gareth, a father of two, is a London-based delivery driver – he works for a large, well-known delivery firm. Two weeks ago, he started taking his friend Stuart on jobs with him for a week or so. He gave Stuart a few quid for those days – but that wasn’t the point. One driver Gareth knows broke his leg last year and got a bill for £500 from the delivery company for the cost of finding a replacement courier. Stuart was there to learn the ropes so if anything happened to Gareth, he would have someone to take on his deliveries.

These charges are common practice. In 2017, a national delivery company billed 47-year-old Emil Ibrahimov £216 on the days he could not work after a car drove into him while he was carrying parcels from the rear of his van in east London. One well-known courier firm charges drivers £150 per day if they can’t find a replacement and one of the country’s biggest delivery companies charges up to £250 per day.

How can we expect people to haul themselves out of poverty in a job market where people are fined for being off sick? 

Precarious employment

The rise in casualised agency work, zero hours, short-hours contracts and enforced self-employment means millions of jobs are intrinsically precarious and stacked against the employee. Workers at one international corporation’s flagship warehouse in Rugeley, Staffordshire, face £8 per day bus fares from Birmingham – which reduces their daily salary to less than the minimum wage.

The Sunday Mirror found staff asleep on their feet, exhausted by picking and packing targets of nine seconds to grab and process to reach 300 items an hour, for 55 hours a week with only two half-hour breaks per day. Those who fell behind faced the sack – in just a few weeks at the warehouse, the Sunday Mirror journalist witnessed at least two ambulances called to help colleagues who collapsed on the job.

Last January, UK factories making clothes for well-known retailers featured on Channel 4’s Dispatches for paying workers between £3 and £3.50 per hour. In December, almost 260 companies were ‘named and shamed’ for failing to pay the minimum wage – underpaying staff by hundreds of thousands of pounds. 

More people are struggling to get by

Poverty is increasing. More and more people are struggling to get by. We need to put this right so that everyone has a decent standard of living. We need to make work pay again to give people a fair chance to build a better future for their families.

If your company can’t afford to give employees the national minimum wage and sick pay, then how viable is your business in the first place? The measure of success should be a company that’s good enough to succeed without exploiting people or breaking the rules. 

How the Government can help

The Government can help – by lifting the benefit freeze and reversing work allowance cuts to help people trapped by rising prices, falling income and insecure low-paid jobs. Work should be the route out of poverty. Instead the Government is planning to introduce means testing for free school meals which, according to the Children’s Society, means a family with one child that earns more than £7,400 would need to earn £1,124 a year more, the equivalent of working 2.4 hours more each week on the National Living Wage, to make up for the loss of free school meals.

This is about those struggling to get by, but it’s also about everyone. On the same day as the Coalition released its child poverty figures, a report from the RSA warned of an emerging 30:40:30 society, with around 30% of the population living comfortably, 40% just about managing and a bottom 30% not managing to get by at all. Economic insecurity is the new normal.

None of us, in other words, can afford to let this go unchecked. Although we have effectively full employment – with unemployment at its lowest since 1975 – real wages are falling and the decline is accelerating. The UK is the only major OECD country where GDP has risen since the 2007 recession but wages have still fallen. We are all slipping slowly down. If we don’t act now, we’ll keep on falling. 

Stephen is the author of The New Poverty, recently published by Verso.