In U.K., work is no longer a way out of poverty: report
TheStar.com – Business – Government report says wealthy seniors should take a bigger hit from austerity programs.
Oct 17 2013. By: Danica Kirka
LONDON—Having a job no longer offers a sure route out of poverty in Britain, with the working poor crushed by rising costs and stagnant wages, a first of its kind report from the government said Thursday.
The Social Mobility and Child Poverty Commission report concluded that the government must do more to help low-paid workers. While government policies have traditionally focused on helping welfare recipients get work, the missing piece of the “policy jigsaw” is how to help people who are working but not economically stable, said Alan Milburn, the commission’s chair.
“These are the people that heed the urgings of politicians of all hues to do the right thing, to stand on their own two feet, to strive not shirk,” Milburn said. “Yet all too often the working poor are the forgotten people of Britain. They desperately need a new deal.”
The report concludes that 4.8 million workers, often women, earn less than a living wage.
Young people have been especially hard hit by deteriorating economic conditions. The report said that two-thirds of Britain’s poor children now live in families with at least one working adult. In 1997, that was less than half.
Public spending, particularly tax credits that subsidized stagnating wages, had in the past been the main engine that drove reductions in child poverty, but government austerity following the global financial crisis “removes that prop.”
“The principal problem is that those working parents simply do not earn enough to escape poverty,” the report said, adding that Britain has one of the highest rates of low pay in the developed world.
In a recommendation that will stir controversy, Milburn said that wealthy retirees will have to take a bigger share of the hit from austerity programs. It isn’t sustainable to continue “favouring pensioners over their children and grandchildren.”
Several government programs in Britain, such as a winter fuel allowance, are given to older people regardless of income and they remain firmly engrained as an entitlement.
Any cutbacks would be politically challenging. Deputy Prime Minister Nick Clegg objected to the idea even before the report was published. “Punishing pensioners isn’t going to help a single child achieve more in life,” he wrote in a piece in the Daily Telegraph.
But the report struck a nerve among anti-poverty campaigners, who noted the need to comprehensively act on the problems of the poor. Alison Garnham, chief executive of the Child Poverty Action Group, appealed for government “to help families suffering problems like low pay, lack of full-time work and job insecurity.”
The commission was set up to monitor the progress of government and others in tackling child poverty and improving social mobility. It has been studying the issue for nine months.
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