Wages, taxes and top-ups: the changing role of the state in helping working families make ends meet

In the past two decades, the growth of tax credits combined with only modest improvements in wages has changed the balance of working families’ incomes.

This research explores these trends by measuring the disposable income of typical low-earning families and comparing it to the Minimum Income Standard – the measure of an adequate income defined by members of the public.

This paper:

• looks at the changing influences of pay, benefits and taxes in allowing working families to reach minimum living standards from the late 1990s to the most recent recession;
• outlines and evaluates ways to help more low-earning families achieve an adequate income;
• assesses how the three main political parties’ tax policies would affect families on lower incomes.