How working together to combat poverty works for us all

Mike Danson, Heriot-Watt University

Today, HM Revenue & Customs has named and shamed a number of large national chains and about a dozen smaller Scottish businesses in the personal services sector for failing to pay workers the national minimum wage. Many many more profitable companies are paying less than the Living Wage and are employing some of the very poorest on zero hour contracts, people who are desperate for wages to put food on the table, shoes on their children’s feet, to heat the house in winter, and pay their way through college and university. The workers are doing what they have been told to – work your way out of poverty. But working your way out of poverty isn’t working, trickle down economics doesn’t work, and it’s going to get worse as Working Tax Credits are withdrawn and other benefits cut.

Researching this using Treasury, DWP, EU and other official statistics and the excellent work by Profs Christina Beatty and Steve Fothergill recently highlighted some horrendous impacts on the poorest in society, a failure even to achieve the distorted objectives of the Westminster Government, but also an under-appreciation of the implications for local enterprises and entrepreneurs across Scotland. The cuts in social security benefits – announced even before this summer’s additional £12bn cuts per annum are considered – will remove £1.5bn from the pockets of Scotland’s poor and so directly reduce spending in local shops, services and businesses by that amount. Multiplier effects will exaggerate that loss to the country’s enterprises. The numbers on long term sick and disability benefits are showing no signs of falling, the downturn in numbers on unemployment benefits is lower and slower than any previous recovery from recession. Jobs being created are low paid, low productivity, low innovation and low profit. These austerity cuts will damage the economy but especially the poor (both working and inactive), small and medium enterprises, and put back recovery and regeneration. A different strategy is needed for Scotland.

Much of the attention this week has been quite correctly focused on how the poor are being so severely affected by the Government and Parliament in Westminster, and the other posts on this dedicated Challenge Poverty Week blog have discussed many aspects of the impacts of the cuts and changes in entitlements to support. There are wider economic costs which we should be aware of and these need embedded into any analysis of the system-wide implications of austerity because they demonstrate how the cuts hurt us all. Cutting the incomes of those on benefits directly reduces expenditure in their communities; when you are making everyday choices between eating, heating, clothing and the other necessities of life there is no question of being able to save.

Every pound ‘saved’ by the Treasury from the Social Security budget reduces the UK economy by the same amount initially, but then by more as this money is not circulating around the local economy. These effects are felt most acutely in the most deprived parts of the country – the old industrial areas, rural, seaside and traditional mining communities. Where these cuts represent redistribution from poor to rich through tax cuts and diverted spending through macroeconomic choices different areas benefit: specifically where higher rate tax payers live. But as the better off will save their extra incomes or disproportionately spend on imported goods, foreign holidays or certain retail and hospitality sectors, the overall combined impacts will be negative for the national economy. Money leaking out of poor neighbourhoods, through cuts, and out of the country through redistribution to the already well-off damages employment, incomes and power of small and medium enterprises as well as the country as a whole.

These redistributions by class, community and place are detrimental to families, but also to entrepreneurs who serve them close to home. So much for building an enterprising culture, while those individuals and groups who benefit from increasing inequality and personal wealth are featherbedded through divisive and inefficient policies. Promoting economic development of the Home Counties stokes further inflationary pressures, to the disadvantage of the whole and of the rest of the UK, exacerbating the harmful effects on the balance of trade. In brief, an economic strategy based on attacking the poor under a specious argument of balancing the budget will fail of itself, will fail local enterprises and will fail the economy in aggregate.

To address the increase in imports generated by these redistributions, the UK Government and Treasury are now embarked on a mission of attracting capital inflows, and so are running cap-in-hand to foreign governments and moneylenders to balance these other books. Encouraging  overseas, often state-owned, corporations to buy, operate and reap the rewards of supplying our utilities, railways, nuclear power stations, Trident missiles, health and education services – whilst denying our own public sector organisations the opportunity to compete for such contracts –  adds to the long term damage to the economy. The latest Nobel prizewinner (Angus Deaton) recognises the nonsense of this approach, as have former winners (most notably Paul Krugman, Joseph Stiglitz, and Amartya Sen) and economists from across this country and beyond. Poverty and inequality are bad for us all, for small businesses and for generations to come, and it is important that the spillovers from attacks on the poor are not seen just as having inhumane effects on our poorest neighbours.

Solidarity, coherence, innovation, strong trade unions and equality are the characteristics of the world’s leading economies – we find them across the North Sea where those societies lead the rankings on almost all indicators. Before the recession they devoted the highest proportions of their national incomes to social spending, paid the highest out-of-work benefits on any measure; since then they have protected the poor especially from the worst effects of the crises, and their recoveries have been quicker and stronger. Austerity is failing Britain, further cuts to the poorest are exacerbating levels of inequality not seen since the 1920s and not suffered currently elsewhere in Europe. Nordic societies have shown there is a better way, we should pursue it with vigour.

Mike Danson is Professor of Enterprise Policy, School of Management and Languages, Heriot-Watt University

Preventing poverty in the labour market

Adrian Sinfield, University of Edinburgh

Preventing poverty more effectively requires lower unemployment and decent jobs, fair wages and greater security.  This means a ‘career first’ rather than a ‘work first’ approach, with jobs worth having and benefits to the individual, their family and the wider society.

Reducing poverty nowadays is discussed as if it were all a matter of getting ‘them the poor’ to behave better. But preventing poverty requires closer attention to its political economy and so the ways in which the workings of society, polity and economy allow and encourage the creation of poverty.  Tackling prevention in addition to lifting people out of poverty leads to greater and closer scrutiny of the processes that fail to protect people.

A crucial part of this requires a fairer and better working labour market. The objectives were clearly set out by William Beveridge 71 years ago in Full Employment in a Free Society. Full employment ‘means having always more vacant jobs than unemployed, not slightly fewer jobs. It means that the jobs are at fair wages, of such a kind, and so located that the unemployed can reasonably be expected to take them; it means, by consequence, that the normal lag between losing one job and finding another will be very short’ (Beveridge, 1944, p 18).  The aim, he stressed, should always be a seller’s market, not a buyer’s market. ‘A person who cannot sell his labour is in effect told that he is of no use.’ This is ‘a personal catastrophe’ rather than ‘the annoyance or loss’ suffered by the employer who cannot fill a job.

I have quoted Beveridge at such length to bring home the contrast with today’s policy assumptions for the labour market. Throughout his career Beveridge recognised the ways in which the balance of the power in the labour market shifted with changes in unemployment. The higher the unemployment, the more the balance tilts in favour of the employer. This was brought out by classic studies in the past. ‘Hiring requirements tend to rise – the definition of an “acceptable” worker is tightened up’, as Lloyd Reynolds, a pioneer of labour market analysis, pointed out (Reynolds, 1951, p.73). In consequence, those with least bargaining power in the labour market, whether suffering particular disabilities, lacking skills and/or belonging to ethnic, religious and other minorities, become even more vulnerable to exclusion and deprivation.  The risk of low pay and poor working conditions is increased.

By contrast, with lower unemployment employers have to recruit more widely, invest more in training and recruitment, make more adjustments to promote flexible working that allows a ‘family-friendly’ and better ‘work-life’ balance for their employees.

Many basic social policies are more likely to be successful when unemployment is kept low. ‘Maintenance of a high general level of economic activity has priority over improved labor market organisation … because it is a structural prerequisite to the latter’ (Reynolds, 1951, p 75). This was also stressed by Beatrice Reubens when she carried out a detailed, comparative review of European programmes to help the ‘hard-to-employ’, personally visiting and analysing experience in country after country. Low unemployment was a prerequisite for successful rehabilitation and re-employment (Reubens, 1970).

I am aware of no research since that challenges the need to keep overall unemployment low to tackle poverty in the labour market and to better support those caught on its margins. Reducing unemployment is a central part of what needs to be done to reduce inequality and poverty (Atkinson, 2015, ch. 5).

But stigmatizing and mythmaking about ‘shirkers, not workers’ weaken public support for tackling the labour market, rather than the ‘out of work’. Policies of ‘what works’ in keeping voters on side include the opportunistic exploitation of long-term prejudices of ‘we the people’, the taxpayers and contributors, and them, the takers who ‘rest on their benefits’.  But the changing trends in long-term unemployment, David Webster demonstrates, are to be explained by the overall state of the labour market, not by the behaviour or characteristics of those suffering long periods out of work (eg, Webster, 2005).

Politicians and others who should know better – and very often do – continue to nourish the myths despite their careful refutation (Shildrick et al., 2012b). They do not mention that over the last half century basic benefit rates for people unemployed or sick have fallen by one-half compared to average earnings (by the DWP’s own analyses until they were cut as an economy, Sinfield, 2013).  Inadequate ‘welfare to work’ and tougher sanctions policies are feeding the growth of poor jobs that diminishes people’s lives, not helping to preventing them.

By contrast treating people with dignity in the labour market means ensuring that they are offered a job worth having – the ‘career first’ rather than ‘work first’ thinking set out by Ron McQuaid and Vanesa Fuertes (2014). Making bad jobs better is a major theme of the concluding chapter to the 2012 award-winning study by Tracy Shildrick, Rob MacDonald and others, Poverty and Insecurity. The study is ‘about the lives of individuals and families living in or near poverty – despite (or, as this book will show, because of) their enduring commitment to work and repeated engagement with jobs’ (Shildrick et al, 2012a, p. 1).  It reveals the problems of the labour market experienced by the many people caught in the no-pay low-pay cycle.

‘Poor work is the big story’ in a world of greater inequality, insecurity and Social Exclusion (Byrne, 1999, p 69; Lansley & Mack, 2015). Policies to support the Living Wage are valuable, but they have to be accompanied by decent child benefit. The Chancellor of the Exchequer’s ‘misappropriated’ usage of a ‘national living wage’ (Veit-Wilson, 2015; Scottish Government, 2015) provides a fine example of ‘words that succeed and policies that fail’, the subtitle Murray Edelman chose for his book on Political Language (1977) – especially when it is combined with reduced tax credits.

Instead we need a broad policy approach that encourages and supports making bad work better, creating decent, good quality jobs for all (Findlay et al., 2013). As Michael Marmot argues, this will bring benefits that reduce the health gap (Marmot, 2015, ch. 6). This should also include more attention to the practices of poor employers and to the ways that employers providing the poorer jobs are themselves often caught in contracting arrangements with supermarkets or other larger employers.

One enterprising initiative is the Scottish Fair Work Convention tasked with developing the ‘fair employment and workplace framework for Scotland … that articulates a practical blueprint for implementing fair work’. ‘People must feel valued, rewarded, engaged in their work and be allowed to feel they have a stake in the success of their workplace, their community and their country’  (Roseanna Cunningham, Cabinet Secretary for Fair Work, Skills and Training, ‘Scotland: A Fair Work Nation’, 17 April 2015). Now this ambition has to be translated into strong policies in an area that has in the past been much neglected. It could make a valuable contribution to reducing poverty and inequality in the labour market.

Adrian Sinfield is Emeritus Professor of Social Policy and University Fellow at University of Edinburgh.

References:

Atkinson, A. B. (2015) Inequality: What Can Be Done?, Boston: Harvard University Press.

Beveridge, W. H. (1944) Full Employment in a Free Society, London: Allen and Unwin.

Byrne, D. (1999) Social Exclusion, Buckingham: Open University Press.

Cunningham, R. (2015) ‘Scotland: A Fair Work Nation’, http://news.scotland.gov.uk/News/Scotland-a-fair-work-nation-1851.aspx

Edelman, M. (1977)  Political Language: Words that Succeed and Policies that Fail, New York: Academic Press.

Findlay, P., Kalleberg, A. L. & Warhurst, C. (2013) ‘The challenge of job quality’, Human Relations, vol 66:4, pp 441-451.­

Lansley, S. & Mack, J. (2015) Breadline Britain: The Rise of Mass Poverty, London: One World.

Marmot, M. (2015) The Health Gap: the challenge of an unequal world, London: Bloomsbury.

McQuaid. R. & Fuertes, V. (2014) ‘Sustainable integration of the long term unemployed: From Work First to Career First’ in Larsen C., Rand, S., Schmid, J. & JR. Keil (eds), Sustainable Economy and Sustainable Employment, Muenchen: Rainer Hampp Verlag, pp 359-373.

Reubens, B. (1970) The Hard-to-Employ: European Programs, New York: Columbia University Press.

Reynolds, L. (1951) The Structure of Labor Markets: Wages and Labor Mobility in Theory and Practice, Westport, Conn.: Greenwood.

Scottish Government (2015) UK wage plan ‘not a Living Wage’ http://news.scotland.gov.uk/News/UK-wage-plan-not-a-Living-Wage-1dd6.aspx

Shildrick, T., MacDonald, R. , Webster, C. & Garthwaite, K. (2012a), Poverty and Insecurity: Life in Low-Pay, No-Pay Britain. Bristol: Policy Press.

Shildrick, T., MacDonald, R., Furlong, A., Roden, J. & Crow, R. (2012b), Are ‘Cultures ofWorklessness’ Passed Down the Generations? York: Joseph Rowntree.

Sinfield, A. (2013) ‘What unemployment means three decades and two recessions later’, Social Policy Review 25, pp 205-223.

TUC Commission on Vulnerable Employment (2008) Hard Work Hidden Lives, London: TUC.

Veit-Wilson, J. (2015) Stealing a good name: the national living wage http://www.cost-ofliving.net/stealing-a-good-name/

Webster, D. (2005) ‘Long-Term Unemployment, the Invention of “Hysteresis” and the Misdiagnosis of Structural Unemployment in the UK’, Cambridge Journal of Economics, vol 29: 6, November, pp 975-95.

 

Poverty, inequality and ‘the common good’ …

James Henderson, University of Edinburgh

The Yunus Centre for Social Business and Health at Glasgow Caledonian University recently held the first John Pearce Memorial Lecture. John Pearce, who died in 2011, had committed across his working life to ‘collective and community enterprise’ in pursuit of ‘the common good’. He worked in the 1960s in community development abroad, in the 1970s as part of the ‘legendary’ (UK) National Community Development Projects (CDPs), and then, from the 1980s, in developing social business –now termed social enterprise – in Scotland.

Working also as a researcher and writer, John Pearce influenced many through two key publications: in 1993, At the Heart of the Community Economy; and in 2003, Social Enterprise in Anytown (1). I’m certainly one of those he influenced through these books and the powerful commitment to the common good he evokes. So, as part of Challenge Poverty Week, I’m keen to think further as to how such thinking has and continues to be concerned with ‘tackling’ poverty and inequality. Particularly, given the increasing policy focus on ‘community’ and third sector over these last five decades … co-incidentally in parallel to my own lifespan (thus far).

At its simplest, the Institute for Fiscal Studies’ (2) tracking of income inequality in UK through the Gini co-efficient marks the significant rise in such inequality during the 1980s from the historically low levels of the 1960s and 1970. This very broadly-speaking plateaus from the mid-1990s onwards, subject to on-going ups and downs, with current Conservative UK Government policy now predicted as a likely ‘up’ and increase in inequality. Academic discussions are on-going as to the detail of how poverty and inequality connect, see for instance last year’s Challenging Poverty blog. However, the broad tradition of thinking within community development, generated through the CDPs’ action research, has asserted a political economic analysis of poverty as generated by structural inequalities. John Pearce, for instance, argues against the ‘social pathologising’ of individual (working class) neighbourhoods, pointing instead to the economic and historical changes that have impacted on them.

Given this long-term policy focus, or rhetoric at least, on ‘community’ and the third sector, how should this be understood in relation to increasing inequality? Have the two unwittingly become part of the process of sustaining inequality? Would things have been still worse without them? Is the situation more complex than any such simple statements? As crucially, what should their future roles be in seeking social change?

As befitting the community development tradition, John Pearce provides a practical tool and model (3) for supporting practical and widespread discussion of the economic, social and political workings of society. He outlines three sectors or ‘systems’ of economic activity – each potentially working across neighbourhood, local, regional, national and global dimensions – that I’d summarise as follows:

  • Private – ‘the market’ and largely privately-owned organisations that trade within it – whilst recognising that publicly and socially-owned organisations will trade too;
  • Public – ‘the state’ including government, public sector and other official bodies – with emphasis on planning and service provision … also investment and distribution of income.
  • Third – of socially and community-owned organisations and networks: including social enterprises, cooperatives, voluntary organisations, trades unions and faith-based bodies etc.

A seemingly simple framework, perhaps, yet its mix of local-to-global, different forms of ownership and organising, and different and in themselves diverse ‘systems’ for coordinating economic and social activity, has the potential to support any group in generating increasingly complex discussions as to what a more equal society, concerned for social solidarity, would ‘look like’.

Pearce uses it to illustrate an intriguing cooperative, mutual vision of society and economy: one that emphasises the role of social ownership in ‘working for the common good’, and yet is not naïve as to the respective roles of the state and the market. Importantly, his model can also support wider political economic discussions of the contributions of state, market and ‘community’. It can explore insights, for instance, from thinking on a social democratic post-Keynesian welfare state; a ‘green’ egalitarian steady-state economy; and so on … and likewise how free market (neo-liberal) approaches have increased the scale of poverty and inequality since the 1970s.

His model also gives us the space to think further about the role of such a third system in working for equality and the redistribution of resources within society … rather than as simply and solely a means to deliver local services and build social capital. Pearce’s own insight here: the need for independent, socially-owned organisations and enterprises, controlled by working people – the common usage, rather than the current Chancellor’s – and their communities, with the capability and confidence to challenge current norms, explore alternative approaches, and work for ‘the common good’.

Dr James Henderson is a social researcher working at the University of Edinburgh – the views expressed above are his own.

 Notes:

(1) This blog draws from these two publications, and John Pearce’s chapter in The Social Economy: International Perspectives on Economic Solidarity (edited by Amin, 2009).

(2) View the Institute for Fiscal Studies’ report Living Standards, Poverty and Inequality in the UK: 2015 (Bellfield et al.; p.32) at: http://www.ifs.org.uk/uploads/publications/comms/R107.pdf.

(3) Pearce’s three systems model of the economy appears first in Social Enterprise in Anytown (2003). It is reproduced in similar vein in Mike Bull’s (2008: p.5) Balance: Unlocking Performance in Social Enterprise, view at: http://www.socialenterprisebalance.org/docs/Unlocking_performance.pdf.

Responding to refugee poverty: lessons from local and international research

Gina Netto, Heriot Watt University

Europe is now facing a scale of migration that many view as unprecedented. While it is difficult to estimate the exact numbers of people who are migrating to Europe, it is clear that there is an urgent need to consider responses to refugees, many of whom would have lost their homes, loved ones and possessions. This presents a challenge to individual member states of the European Union, many of which, including the UK, are already facing a severe housing shortage. Yet, even while governments engage in extensive negotiations over the numbers of people to accept, there is evidence of a willingness from some governments and many community organisations to welcome refugees and to consider how they can be assisted in building new lives.

Among the most urgent considerations is housing of refugees. Here, extensive research informs us that housing needs to be considered along with access to other key services including education, services which promote employability, health and social care services. These are needed in order to assist refugees in not only finding routes out of poverty but to thrive.

Housing allocation policies need to be sensitive to the demographics of existing communities. Areas with high levels of poverty, deprivation and unemployment – where the arrival of refugees might be viewed as presenting additional competition for available resources – should be avoided, if at all possible.

But alongside this, If it is difficult to find available housing in other areas, then extensive work needs to be undertaken with existing communities, including investing in new accommodation for the local population and community development in order to avoid racial hostility and tension. Local communities should be prepared for the arrival of refugees. Awareness of the reasons for forced migration should be raised. Local residents should also be assured that they would not be disadvantaged through increased pressure on services. The allocation of housing to refugees in these areas should be gradual, allowing existing residents to become accustomed to new arrivals over time.

It is also timely to consider what can be learnt from diverse social, political and economic contexts in terms of tackling extreme housing exclusion. A forthcoming report involving case studies in eleven countries that will be published by the Joseph Rowntree Foundation will highlight several international lessons (Netto et al, forthcoming). Many of these solutions challenge widely held conceptions of what constitutes a ‘home’ and the processes of ‘home-making.’

Some of these solutions have been made possible by advancements in technology and design. They present alternatives to not dealing with the economic dimensions of housing exclusion, but also in addressing its social aspects.

Perhaps one of the most significant lessons to emerge from this study is the potential for mobilising change and changing the discourse around housing exclusion. In the light of the refugee crisis, this requires viewing the large scale displacement of individuals who are displaced by war and political conflict not as a burden which must be spread, but as an opportunity to consider how we can provide more affordable housing for all.

This week I was invited to a two day workshop on Housing refugees organised by the International Federation of Housing and Planning in Deventer, Netherlands (link provided). Here, academics and practitioners engaged in lively, intense and open debate over what could be done to respond to the needs of refugees. While the housing shortage in many member states of the EU was readily acknowledged as a serious challenge, it was not seen as a barrier. Rather, the current situation was seen as an opportunity for stimulating discussion on the widening of housing options beyond what is conventionally practised in member states, without compromising acceptable standards of accommodation or environmental goals.  Encouragingly, a sense of common purpose united individuals from different political persuasions, cultures and professional orientations and refugees were viewed as part of the solution.

This brought home to me that in considering how we respond to the arrival of refugees, we must not only ensure that the mistakes of the past are not repeated and consider what can be learnt from other contexts. We need to reflect on whom we consider to be inside or outside our ‘imagined community,’ what kind of community we wish to be and the lengths that we are willing to go to achieve this.

Reference

Netto, G, Fitzpatrick, S, Sosenko, F and Smith, H (forthcoming) International lessons on tackling extreme housing exclusion. Joseph Rowntree Foundation: York

Link to IFHP workshop

Dr. Gina Netto, Associate Professor/Reader, Institute of Social Policy, Housing, Environment and Real Estate (I-SPHERE), Heriot Watt University

 

Assessing the cost of the cuts on poorer people and places

Annette Hastings, University of Glasgow

As the Chancellor George Osborne asks government departments to draw up plans for cuts of 40% in the Comprehensive Spending Review due next month, and the Local Government Association warns of a knock out blow to local services and even bankrupt councils, it is worth bringing into focus the impact on service users experiencing poverty – as well as what councils can do to protect such groups and communities.

Between 2011 and 2014, researchers at the Universities of Glasgow and Heriot Watt worked with four local authority case studies across England and Scotland to analyse how local authorities have dealt with growing budget gaps of between 7% and 11% per year. Reports for the Joseph Rowntree Foundation documented the effects of local authority cuts on poorer communities.

The research pointed out how little room for manoeuvre local government has when it tries to protect poorer groups from the worst effects of budget pressures – councils spend almost two thirds of their resources on the services which poorer groups rely on. This means that to date, only a tiny per cent of the total savings which councils have made to manage austerity have come from services which tend to be used more by better off groups – services such as museums, arts and planning.  But more than half of all savings have come from services which are used mostly by the poor – money advice, housing, social care and social work.

It was clear that people were now beginning to notice more significant changes to services – particularly worsening environmental services as well as reduced provision for children and young people. As one service user living in a disadvantaged neighbourhood said about her local park:

‘It used to be good. You could take the kids for picnics. Then they stopped cutting the grass and taking care of it so people couldn’t use it anymore.’

Council and voluntary sector staff reported rises in overall levels of need and that the needs of the most vulnerable and disadvantaged are becoming more intense. Benefit reductions and withdrawals through welfare reform were significantly amplifing problems:

These people are coming to us at the end of their tethers … I don’t think we’ve ever had people quite as bad as we have at the moment” (Advice service provider)

Staff reductions had increased workloads for remaining staff, limited the time frontline staff could spend on public-facing work, and reduced the number of staff in operational roles (such as social work or street cleaning. Many members of staff reported feeling stressed due to overwork, job insecurity and reduced morale. The evidence suggested that some council staff were effectively ‘shock absorbers’, cushioning service-users from the worst impacts of the cuts. Importantly staff were concerned that services were suffering in various ways. They reported reduced standards with clients waiting longer, less time to help clients access services, less collaboration between colleagues, and less time for strategic thinking to improve services long term.

So given these challenges and constraints what, if anything, can local councils do to mitigate some of the impacts of austerity on those who use and need their services to the greatest degree?  To help with this, the research team has produced a tool to help councils assess the impact of cuts on services and on poorer groups of service users.  Called The cost of the cuts: A social impact tool for local authorities, it can help councils to produce a robust assessment of the implications of savings plans for service user groups experiencing varying levels of socio-economic deprivation. It can also help them to analyse the extent to which distinctive population and service user groups experience different levels of cumulative service change, and consider whether savings strategies should be changed as a result.

In producing the Social Impact Tool, there is no suggestion that the level of cuts facing local government should be regarded as necessary or inevitable. However, the Tool might help some councils find ways to minimising some of the harms that these cuts are bound to cause to services relied on to challenge the effects of poverty and inequality.

Please feel free to contact Professor Annette Hastings or Maria Gannon, Research Associate at the University of Glasgow if you would like to know more about the Social Impact Tool.

 

Lone parents on a low income – how much is ‘enough’?

Helen Graham, Edinburgh Napier University

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities.” – Peter Townsend [1]

Research into determining a minimum income standard (MIS) in recent years has suggested that people in the UK broadly agree with Townsend’s understanding of a poverty line that exceeds the most basic needs, and encompasses a range of items and activities that facilitate participation in ordinary life. [2] This includes a certain degree of expenditure, for example, on transport, clothing and social activities. It is, however, a level of expenditure that is beyond reach of those on out of work benefits. For a hypothetical lone parent with one child in 2015, the MIS is £291.14 per week (excluding rent and childcare). Their benefit income (from a typical combination of Income Support or Jobseeker’s Allowance, Child Benefit and Child Tax Credits), at £157.43, covers just 57% of this.

But how do lone parents on out of work benefits themselves feel about the level of income they receive? To what extent do they feel that it falls short of allowing them to meet their needs – and indeed, what do they understand as constituting ‘enough’? Recent research by the Employment Research Institute [3] [4] has explored lone parents’ lived experiences of being in receipt of out of work benefits, and suggests that they simultaneously view the amount they receive as both enough and insufficient.

The general feeling among the lone parents participating in the research is that the amount received is just sufficient to live on and no more. It allows them to keep a roof above their heads, and to pay bills and buy food and other essential items. However, there is little or nothing left over; they are unable to take their children on trips, and buy them the things that they want, and that their contemporaries have. Further still down the list of priorities are lone parents’ own social lives, and in some cases even basic items, with some restricting their own diet in order to save money.

It just gets you there and no more. There’s nothing to play about with, you can’t treat yourself.”

You just scrape by on your benefits really. By the time you pay your bills and get the shopping… I manage. I’ve got to manage!

It is a struggle, it’s not easy, but I get by. But there’s never any spare money to do anything, if you wanted to take the kids out anywhere.”

I get by. I do struggle, you cannae deny that you struggle, but in all fairness it’s enough to cover me, my weans, it’s enough to make sure we’ve got all of our bills, it’s enough for the way we live.”

You can’t really ask for any more, can you? You get what you get, you don’t work, so you can’t.”

Lone parents on how they manage on their income [3]

The MIS threshold allows for expenditure on what many of the participants would describe as extras or treats; it includes the resources to run a car if required, and the ability to spend around £45.76 per week on ‘social and cultural participation’. This would encompass things like taking children on trips, as well as the opportunity to socialise themselves. But in reality these activities constitute a substantial proportion of their income, which is in any case already accounted for by essential items.

Quite often I get money on Tuesday and by Wednesday I have got pennies in my purse. I don’t have £2 to give to my daughter to go to her Guides thing.”

If the Scottish Government want children to be healthier, we need to get them out… but for [self and two children] to go on an away day it would cost £7.50, that’s like 10 per cent of my benefits for that week.”

I have one social night out and that’s it, it foils me for the whole month. My budget is that tight, so if I have a night out, I struggle. There’s no room to live, really. When I take into account the needs of my family, of my daughter, to encourage her to grow and educate her… for me [daughter’s extracurricular activities] are all educational activities that are going to benefit her in the long run… I want to make sure these things are maintained for her.”

Lone parents on the cost of activities [4]

Most of the lone parents participating in the research explicitly defined the amount they receive as enough – as one participant put it,  for the way we live. And yet there was also a sense that it is not; that when even modest expenditure on items that would be beneficial to their children is out of the question, then the way they live is not enough. That their children deserve more, to live a life that is not so far out of step with that of their peers.

The inability to participate in everyday social, cultural and educational activities can only be damaging to the social relationships of lone parents, and to the social and educational development of their children. Those who find themselves trapped on out of work benefits by the difficulties of reconciling their roles as sole earner and carer, and awarded little by a system which places a low value on caring, are reaching for an ordinary life and falling short. If they are to lead ordinary lives, they will need a helping hand.

[1] Townsend, P. (1979). Poverty in the UK. Harmondsworth: Penguin.

[2] The research established a minimum income standard through a process of discussion and debate between experts and focus groups representing a cross-section of the population. A minimum income calculator is at: http://www.minimumincome.org.uk/. The methodology is outlined in Bradshaw et al. (2008). A minimum income standard for Britain: what people think. York: Joseph Rowntree Foundation; 2008. http://www.jrf.org.uk/publications/minimum-income-standard-britain-what-people-think

[3] The Employment Research institute was commissioned by the Glasgow Centre for Population Health to conduct research into the impact of welfare reforms on lone parents in Glasgow.

Graham, H., & McQuaid, R. (2014). Exploring the impacts of the UK government’s welfare reforms on lone parents moving into work. Glasgow Centre for Population Health. http://www.gcph.co.uk/publications/497_impacts_of_welfare_reforms_on_lone_parents_moving_into_work_report

[4] The Employment Research Institute has also been commissioned by the Scottish Government to conduct a longitudinal qualitative study on the impacts of welfare reform in Scotland.

Graham, H., Lister, B., Egdell, V., McQuaid, R., & Raeside, R. (2014). The impact of welfare reform in Scotland – Tracking Study: Year 1 report. Scottish Government Social Research. http://www.gov.scot/Resource/0046/00463006.pdf

Graham, H., Egdell, V., McQuaid, R., & Raeside, R. (2015). The Impact of Welfare Reform in Scotland – Tracking Study – Sweep 3 report. Scottish Government Social Research. http://www.gov.scot/Resource/0047/00477917.pdf

Dr Helen Graham, Research Fellow, Edinburgh Napier University

The Challenge of Challenging Poverty Myths

Stephen Sinclair, Glasgow Caledonian University

Most people in Britain are ignorant about poverty and welfare. This might sound rather superior or even sneering coming from an academic paid to study social policies. However the point is not to boast but clarify what is involved in challenging poverty and in particular prevailing false beliefs about it.

Evidence of the scale of misconceptions about poverty and those who experience it in Britain is well established and abundant. For example, about one third of people in Britain believe that more is spent on Jobseeker’s Allowance than on old age pensions. In fact £4.9 billion is spent each year on JSA compared with £74.2 billion on pensions. This is not merely a slight overestimate, it is the opposite of the case by a factor of 15. Similarly, the public grossly over-estimates the scale of social security fraud and abuse: 75% of respondents to the 2013Scottish Social Attitudes survey believed that ‘large numbers of people falsely claim benefits’ and estimate that about one third of all benefit spending is lost on fraudulent claims. However the UK government estimates that about only 0.7% of the total benefit bill is fraudulently claimed, compared to 2% lost due to administrative error.

It is important to try to correct such mistakes and not allow misleading claims or outright falsehoods to pass unchallenged. There are several excellent fact-checking sites and cases where Social Policy academics or campaigning organisations have rebutted misrepresentations of poverty and policy. Important examples of this include the work of the Poverty and Social Exclusion Survey team correcting some of the misleading claims which underpin the UK Government’s Troubled Families programme or Fran Bennet’s critique of Iain Duncan Smith’s commitment to redefine ‘child poverty’ as defective behaviour rather than a matter of resources and opportunities. A particularly notable example of challenging damaging and misleading images of poverty is the Poverty Alliance’s Stick Your Labels campaign, which has secured widespread political support in Scotland to avoid stigmatising language and portrayals of people experiencing poverty. Such responses will always be valuable and must continue, and providing evidence to challenge misrepresentations and ill-considered views is an important academics duty.

However ‘fact’ checking and corrections are not enough to challenge some of the views and accounts of poverty which have a hold on the British imagination. Some of the opinions on this issue are so wide of the mark and so firmly held that evidence alone cannot shift them. Some Social Policy academics have noted persistent indestructible zombie theories and concepts – ideas that somehow still remain alive, stumbling through the public mind and policy debates no matter how much evidence is produced to kill them off. A common example is the idea that poverty is attributable to a disaffected underclass or to young people who lack aspirations (as opposed to understanding just how firmly the odds are stacked against them). The resilience of some false beliefs means that they should be regarded as myths, i.e. ‘a conviction false yet tenacious’. Myths are not corrected by evidence nor shaken by argument. In fact contrary evidence is rejected as biased, and challenging arguments are dismissed, for example as the rhetoric of ivory tower academics detached from the ‘real’ world. In dismissing some public attitudes as myths there is a danger again of appearing disdainful, but in the face of intransigent resistance to evidence this risk must be faced. We might support a plurality of values in society and protect the equal right of all to express their views in welfare debates, but there is no democracy over facts. The challenge is that facts about poverty and welfare do not ‘speak for themselves’, they are filtered through frames of interpretation. These filter what people are able or willing to see. Such frames are not themselves questioned; in fact it takes a considerable effort even to realise that everyone sees the world through the frames we each have acquired. As George Orwell observed ‘To see what is in front of one’s nose needs a constant struggle’; most people are not willing to make the effort.

Therefore, in one sense it is pointless to try to ‘correct’ or rebut myths; they should be regarded as something to be studied and explained[1]. This does not seem to provide much comfort for those trying to challenge mistaken views and false beliefs about poverty. However one implication is that is if we decide to wait for British public opinion to swing behind a commitment to seriously reduce poverty we could be waiting a long time. Instead of waiting for public support to catch up with the facts of poverty, political leadership is required to do what is right even if it might not currently be popular. The previous Labour government deserves some credit for showing such leadership: if they had waited for public concern to become animated then they would not have introduced the measures which contributed to reducing poverty among older people, which had been one of the greatest sources of the risk of poverty for about 50 years after WWII. Similarly, the pledge made in 1999 – and now effectively abandoned by the current UK government – to eradicate child poverty within a generation was not made in response to popular demand, although it proved popular when it was drawn to the public’s attention. It may be politic to wait for opinions to shift, but when the evidence is compelling and public opinions are based on ignorance and intransigent prejudice it is not ethical and certainly not courageous. If we always took that safe course then not only would there be no equal right to marriage in Britain but homosexuality would still be criminalised. Understandably, politicians would prefer to do not only what is right but also what is popular. Unfortunately, when it comes to challenging poverty in Britain this is a luxury that may be paid for by the avoidable suffering of those who most need protection from the misinformed and mystified.

[1] As I try to do in my forthcoming book: An Introduction to Social Policy Analysis: Illuminating Welfare (Policy Press).

Dr Stephen Sinclair is Reader in Social Policy at Glasgow Caledonian University