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Low wages need to rise for those at bottom to escape poverty

Commenting on today’s (17 October) report by the Social Mobility and Child Poverty Commission, Peter Taylor-Gooby, Professor of Social Policy at the University, has said wages for people at the bottom of the income scale need to rise if they are to escape poverty.

Professor Taylor-Gooby argues that many low-waged workers living in poverty are women with family responsibilities and that the UK urgently needs better and cheaper child-care.

Professor Taylor-Gooby said: ‘The report is absolutely right. For those at the bottom, work is no longer a route out of poverty for the simple reason that wages are too low. The official Department of Work and Pensions research (Households below Average Income) shows that 59 per cent of those who fall below the poverty line live in working households.

‘The failure of the wage system is hardly surprising. Incomes have been growing steadily more unequal for the past 30 years. While average incomes (after taxes and benefits are taken into account) have increased by more than a third in real terms since the late 1970s, for the bottom five per cent they have gone up by about a fifth, and have stagnated since 2004. The impact of the Great Recession from 2007 has been to push down wages across the board.

‘Employers need to increase wages at the bottom and government needs to ensure that wage rates keep up by pegging them to the average. This won’t stop the wealthy at the top continuing to move even further away from the living standards of most people but it will mean that fewer people work for their poverty.

‘Many of the very low-waged workers are women with family responsibilities. We urgently need better and cheaper child-care. Reversing the cut-backs in Sure Start would be one way forward.’

The Social Mobility and Child Poverty Commission is chaired by the government’s social mobility tsar Alan Milburn.

Peter Taylor-Gooby is Professor of Social Policy within the University's School of Social Policy, Sociology and Social Research. His arguments on welfare spending are developed in his latest book, The Double Crisis of the Welfare State and What We Can do About It, published in April 2013 by Palgrave Macmillan.


Story published at 2:34pm 17 October 2013

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Last Updated: 12/06/2013