The working poor – a 21^st century crisis

Everywhere you look, costs are increasing. In the year 2022, with prices skyrocketing and wages not keeping up, working households are unnecessarily living in poverty. It’s time we act now to narrow the gap between income and expenditure.

 

 

Working poverty in the UK

17.4% of working households in the UK are currently living in poverty (The Guardian, 2021). This means that individuals are giving up to 40 hours a week of their time to an employer, and still not earning enough money to survive. This poverty will be felt in various ways across the UK - meals not eaten, bills unpaid, clothes gone without, and showers skipped.

Working families are having to take out credit cards and loans to keep their heads above water, putting them in a vicious cycle of having more debt to pay back, with the same amount of money coming in. These households teeter on the edge of having to use the benefits system as a form of survival – with many having to claim universal credit to top up their wages. 

Rising prices

So, in 2022 why can’t people afford to survive on their wages?

Kirsty Allsopp was recently quoted saying that the reason people cannot afford to buy a house is due to the luxuries they have such as a Netflix or gym subscription. (The Times, 2022). This is not the reason.

The actual answer? Prices everywhere are rising, and wages are not rising to reflect this.

For example, the UK’s energy price cap will rise by 54% in April, which means a £693 per year increase for the average customer (MSN, 2022). Research from the Joseph Rowntree Foundation shows that low income working households will spend on average 18% of their income after housing costs on energy bills after April (JRF, 2022). For those living hand to mouth, this means choosing between heating and eating.

On top of this increase in April, national insurance contributions will also be going up. That means that an individual earning £20,000 a year will be paying an extra £130 a year – just over £10 a month (The Guardian, 2022).

Once you’ve taken this into consideration, along with house prices rising by 9.8% during 2021, is it any wonder why comments such as those from Kirsty Allsopp fall flat on the ears of those barely keeping their heads above water?

The Office for National Statistics has stated that average earnings grew at a rate of 3.5% in November. However, inflation reached 5.1%. With the planned energy price hike in April, this will push inflation to 7.5% (The Guardian, 2022).

Real life example

I spoke with a young working couple. Struggling with the price rises, they have had to put a lot of their plans on the back burner. “We wanted to try for a family as soon as we were married, but with our energy prices rising, and our wages barely moving we are going to have to wait until we are in a better financial position - whenever that may be. We both work 40-hour weeks. We consider ourselves the lucky ones as we can afford to pay our bills currently, but the price rises are just becoming unmanageable. We have also had to say goodbye to owning a house anytime soon – we could perhaps be approved for a mortgage, but don’t have the spare income to afford a deposit. It's a pretty dire situation, and one that we struggle to see a way out of.”

It is glaringly obvious that there is nothing that can be done here to offset the costs. No subscription cancellation will make this doable for those on low incomes, and something needs to be done.

Call to action

We need to act now, before more households are pulled into the depths of poverty.

At present, employers are required to pay the national living wage, but they can voluntarily choose to pay the real living wage. The real living wage is an hourly rate of pay calculated by the Living Wage Foundation charity based on what people need to live on, which is calculated at £9.50 per hour (Money Saving Expert, 2020).

Although this will not solve the problem entirely, it will go somewhere towards bridging the gap. However, we cannot do this alone. We need to take an activist approach, join as a collective, and make our voices heard. This will take a coalition of all different groups, from the wealthy to those who experience this day in, day out. We can no longer stand by and let this take place around us. 

Sign the petition below to help those in need. 10,000 signatures will receive a response from the government. After 100,000 signatures, petitions are considered for debate in Parliament.

In the 21^st century a working family should be able to afford to live at the VERY least. This means making it a legal requirement for employers to pay the real living wage.

CLICK HERE TO SIGN #NOMOREWORKINGPOOR

References 

Graham, R., 2022. The Times. [online] Thetimes.co.uk. Available at: <https://www.thetimes.co.uk/article/of-course-young-people-can-afford-a-home-just-move-somewhere-cheaper-says-kirstie-allsopp-dpt9q3v3c> [Accessed 14 February 2022].

Image - The Fourth Revolution Blog | Understand how our World Transforms to Thrive!. 2022. How to Overcome The Critical Issue of the Working Poor in the Collaborative Age | The Fourth Revolution Blog. [online] Available at: <https://thefourthrevolution.org/wordpress/archives/5406> [Accessed 14 February 2022].

JRF. 2022. Rising energy bills to ‘devastate’ poorest families, adding to harmful legacy for millions of children sinking deeper into poverty. [online] Available at: <https://www.jrf.org.uk/press/rising-energy-bills-%E2%80%98devastate%E2%80%99-poorest-families-adding-harmful-legacy-millions-children> [Accessed 14 February 2022].

Money Saving Expert, 2020 <https://www.moneysavingexpert.com/news/2020/11/-real-living-wage--increases-to-p9-50-an-hour---are-you-due-a-pa/#:~:text=When%20the%20national%20living%20wage%20was%20first%20announced%2C,nicked%20the%20name%20from%20the%20Living%20Wage%20Foundation> [Accessed 14 February 2022].

MSN. 2022. Why gas and electric prices are going up - the rise in energy bills explained. [online] Available at: <https://www.msn.com/en-gb/money/other/why-gas-and-electric-prices-are-going-up-the-rise-in-energy-bills-explained/ar-AATLetl?ocid=BingNewsSearch> [Accessed 14 February 2022].

The Guardian. 2022. Boris Johnson unveils £12bn-a-year tax rise to pay for NHS and social care. [online] Available at: <https://www.theguardian.com/politics/2021/sep/07/boris-johnson-unveils-12bn-a-year-tax-rise-to-pay-for-nhs-and-social-care> [Accessed 14 February 2022]

The Guardian. 2021. Poverty rate among working households in UK is highest ever. [online] Available at: <https://www.theguardian.com/society/2021/may/26/poverty-rate-among-working-households-in-uk-is-highest-ever> [Accessed 14 February 2022].

The Guardian. 2022. UK workers’ pay rises fall behind inflation amid cost-of-living crisis. [online] Available at: <https://www.theguardian.com/business/2022/jan/18/uk-workers-pay-rises-inflation-unemployment-covid> [Accessed 14 February 2022]