In-work poverty is keeping poverty rates in Wales high

10th Sep 2015

Despite falls in pensioner and child poverty, the proportion of households in Wales who live in poverty has remained stubbornly high. Aleks Collingwood looks at what’s pushing up the figures.

Monitoring Poverty and Social Exclusion in Wales 2015, our new report by NPI, shows that 23 per cent of people in Wales are living in poverty. This figure has been flat for the last ten years, but digging down into the figures finds some unexpected trends.

First, the good news. The report finds that some groups are less likely to be in poverty than ten years ago. There has been a major reduction in pensioner poverty, which has fallen from around 26 per cent in the 1990s to 23 per cent in the three years to 2002/03, to 14 per cent in the three years to 2012/13. So even though the number of pensioners has grown overall, they only make up 13 per cent of people in poverty – it used to be 19 per cent.

Child poverty has also fallen, though less dramatically, from 36 per cent (in the three years to 2000) to 31 per cent now (in the three years to 2012/13 and 2013/14).

But working families and young people in Wales are at greater risk of poverty now than they were a decade ago. Working patterns make a huge difference to the risk of poverty: the increase in working poverty was almost entirely in part-working families. Households where people work part time, are self employed or which have one full-time worker and one adult not working (i.e. part-working families) saw an increase of around 100,000 people in poverty over the ten years. On the other hand, in families where all the adults are in work with at least one working full time there was effectively no increase in the number in poverty in the last decade.

This is exacerbated by the high proportion of low paid jobs in Wales. 25 per cent of jobs in Wales are low paid – the same proportion as ten years ago. This rises to 45 per cent of all part time jobs. All in all, 270,000 jobs (mainly held by women) in Wales are paid below two‑thirds of the UK median hourly wage.

So, what should be done to help? The National Living Wage, announced in the Summer Budget, will help some families to find a way out of poverty. But it may not be enough to help all workers make ends meet, particularly those who are only able to find part-time work. And the new round of welfare changes, also announced in the Summer Budget, risks undermining progress for families with children, even those in work.

To really get to grips with the causes of poverty in Wales, there needs to be an economic strategy that focuses on creating better jobs for everyone – jobs that are secure, with more hours, better paid (at least the voluntary living wage where possible) and that offer chances of progression. The strategy also needs to include support for families who want to get back into work or who need support, such as affordable childcare, to get both parents into work.