Nearly 40% of British families, or 8.1 million people, live below the income level regarded as the minimum needed to play a part on society, according to new research by the Joseph Rowntree Foundation.
The low wages of these households do not meet the Minimum Income Standard (MIS), which defines an ‘adequate’ income based on what the public think people need for a minimum acceptable living standard.
The study found that the proportion of people whose incomes failed to meet this minimum has risen by more than a third, or 2.2 million, since the start of the recession, with most of this increase working households.
At the start of the 2008 economic downturn, single people of working age saw the most severe increase in those failing to meet these basic standards, but since 2010 it has been families with children who have seen the greatest increase.
For working households, the increase in those falling below the MIS has been due to stagnant wages and cuts to in-work benefits along with high inflation and rising housing costs, with those in London particularly at risk.
As the government continues to protect pension-age benefits while cutting all other benefits in the name of austerity, households with individuals under the age of 35 are four-times more likely than pensioners to fall below MIS than pensioners.
Commenting on the report, Mike Kelly, head of Living Wage at KPMG, said:
“Childless working households are the worst affected when it comes to low pay – and for them it’s getting worse, not better. For far too long low income households have been struggling to make ends meet and for young people who are trapped in low paid jobs, with little prospects, it’s an even bleaker situation. The fact remains that more than five million people are earning less than they need to live on. Too many families still struggle to afford the basics, meaning we face a scenario that, in 2015, should have long been consigned to the footnotes of history.
“This is the perfect opportunity for employers to consider whether they can join the growing list of businesses paying a Living Wage. It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.
“Business and government need to work together as we are in danger of creating a ‘lost generation’ of low paid youth workers in working poverty. It’s time to take responsibility to ensure that staff and suppliers receive a fair wage.”