New report: UK poverty to rise by 2020


8:10 am - May 9th 2012

by Newswire    


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New research published today (9 May) by the Joseph Rowntree Foundation finds that changes in the labour market, combined with changes to the tax and benefit system, over the next decade are likely to increase relative poverty rates across the UK.

The report, Poverty and Inequality in 2020: Implications of Changes in the Structure of Employment, also found that changes that we might expect to lead to lower poverty, such as reducing the gender pay gap or rebalancing regional growth, are (by themselves) unlikely to do so.

It is widely thought that job market changes could help to reduce poverty in the UK However, today’s report finds that expected changes to the labour market will actually increase relative poverty in the UK by 2020 and do very little to affect absolute poverty.

The key forecasted changes in the labour market over the next decade, including the type of jobs available and the expected general improvements in the qualifications/skill levels of workforce, will tend to widen inequalities rather than reduce them, continuing recent historical trends.

The main reason for the projected rise in poverty rates is that earnings are forecast to grow in real terms over the decade, while benefit typically will not (and some will fall in real terms through savings in social security spending).

As earnings are a more important income source for those in the middle and top of the income distribution than those at the bottom, this causes inequality and relative poverty to rise.

But the projected changes to employment structure, such as the continuing growth of both high-skilled and low-skilled jobs at the expense of those in the middle, will also cause relative poverty to rise slightly.

The full report and findings: Poverty and Inequality in 2020: Implications of Changes in the Structure of Employment, by a team from the Institute for Employment Research at Warwick University and the Institute for Fiscal Studies , is available to download for free from www.jrf.org.uk

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Reader comments


well Brown warned us he said dig the garden as they did in the Victorian period keep chickens and learn to feed your self, this is the new world we are living in.

Mind you if you had a garden in the Victorian period you were middle class, so perhaps that who he’s talking about

“The main reason for the projected rise in poverty rates is that earnings are forecast to grow in real terms over the decade, while benefit typically will not (and some will fall in real terms through savings in social security spending).

As earnings are a more important income source for those in the middle and top of the income distribution than those at the bottom, this causes inequality and relative poverty to rise.”

…and of course the Lib Dems are determined to compound this effect by continuing to raise the personal allowance. How different would the picture look if the £7 billion a year or so being handed back to middle and high income households through this tax cut was instead being spent on tax credits and other benefits targeted at low-income households?


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