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Why work matters

October 14th 2020

As the Bevan Foundation continues its activities to mark Challenge Poverty Week, Steffan Evans sets out why work still matters as a solution to poverty

The latest labour market statistics paint a grim picture about the state of the Welsh labour market. With the unemployment rate increasing and the number of hours worked by workers decreasing it is clear that the economic impact of the coronavirus is starting to affect the jobs market. But why does work matter when it comes to solving poverty?

Being in work does not guarantee that a family can escape poverty.

Over half of people living in poverty in Wales live in households where at least one person is in work. The labour market is clearly failing too many people. Low pay, a lack of hours and unfair terms and conditions are all putting pressure on families, driving them into poverty. At first glance it may be tempting to conclude that work is no longer a route out of poverty but a closer look at the data paints a more complicated picture.

Work remains the best option

In households where there is no one in work, 60% of adults live in poverty. For households where one, but not all, adults are in work, this figure reduces to 26%, and for households where all adults are in work the figure reduces to 12%.

The statistics are even more stark for households with children. Nearly 80% of children who live in households where no one is in work lives in poverty, compared with nearly 40% of children in households where one but not all adults are in work and 15% in households where all adults work.

Being out of work has long term consequences

Being in a household where nobody works not only increases the risk of poverty in the short term but it also has long term consequences. Some who is out of work can’t put money towards their pension, meaning they will have to rely on the state pension and some means-tested top up payments when they reach retirement age, putting them at greater risk of poverty in old age. People who are not in work also face a greater risk of developing long term health conditions associated with poverty, detrimentally impacting their quality of life.

The evidence is clear, work does matter

The evidence therefore seems clear. Whether people in a household are in work and the amount of work they do has a significant impact on their risk of living in poverty and on their quality of life. A sharp increase in unemployment – as appears likely over the next few months could therefore have a devastating impact on poverty in Wales – both in the short term and in decades to come.

It is also clear however, that in taking measures to protect jobs the UK and Welsh Governments should not be protecting the status quo. It is not right that someone can go to work and not earn a sufficient income to enjoy a decent standard of living. The need to promote fair work has never been greater.

We have already published our proposals on how we think Welsh public services and benefits can be more effectively used to end poverty. The Bevan Foundation will, shortly be publishing a report setting out our vision on how to develop a fair and sustainable economy and labour market. Despite the rising unemployment caused by the pandemic and fears about further job losses bought about by the rise of automation work is still likely to remain a route of poverty for many. Indeed, work may now be more important than ever before.

To learn more about how you can support the Bevan Foundation and Chip in to challenge poverty then visit our campaigns page.

Steffan Evans is a policy and research officer at the Bevan Foundation. 

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