One in seven Scottish families will still be in poverty in the 2020s, even with an 80% employment rate

With 100 days until Scotland votes on its future, new research shows by the mid-2020s, one in seven working-age adults and children could still be below the poverty line - two thirds of them in working families.

The findings are detailed in the third and final referendum briefing written by the New Policy Institute (NPI) and published by the Joseph Rowntree Foundation (JRF) today. The research looks at the challenge that Scotland would face to tackle poverty, even with a much higher employment rate.

Scotland’s employment rate has remained at or above the UK’s employment rate for the last eight years. It currently stands at 73.5% and on rates of growth achieved in the ten years to 2007, it could reach 80% by 2025. At current population levels, this would mean an extra 300,000 jobs in the economy.

The report authors analysed the impact of this growth, looking at what would happen to poverty levels under two scenarios, depending on whether the extra jobs were full or part-time. They found:

  • If the 80% benchmark was reached by the creation of only part-time jobs, poverty among working age adults and children could fall from 800,000 (19.4%) to 670,000 (16.2%).
  • But if most of those extra jobs were full-time, the number in poverty would fall further, to 600,000 (14.6%). 65% of them would be in working families.

The lower poverty rate of the second scenario (of full-time jobs) shows the importance of a higher ‘work intensity’ – where families are able to access jobs with more hours. But this brings problems of its own: policy makers will need to ensure there are sufficient high quality, flexible and affordable public services such as transport, childcare, adult social care and health services, to make it possible for a family to work longer hours.

Dr Peter Kenway, Director of NPI and report co-author, said: “As employment levels rise, post-referendum Scotland must avoid replacing a problem of material deprivation with one of inflexible services and a lack of time: families short of cash are often short on time as well. Both sides of the independence campaign have to address the long-term challenges faced by struggling families of finding secure work that pays sufficiently.”

Jim McCormick, Scotland adviser to JRF, said: “These scenarios highlight the challenges that Scotland must meet if poverty rates are to decrease. Much higher employment would cut poverty, but jobs alone will not eliminate it while low pay and inadequate working hours remain so widespread.

“We need to ensure work pays enough to be a route of out poverty. Working more hours is only part of the answer: housing costs, rates of pay and the tax, tax credit and benefit systems are all implicated. Scotland after the referendum will need policy responses to all of these, whether independent or not.”