Case study

The way out of in-work poverty

Research on in-work poverty has informed the employment policies at three important employers in the city of York.

The issue

For many families in the UK, employment does not provide an escape from poverty. Particularly in a time of austerity and low economic growth, the challenges faced by low-paid workers in earning enough to support themselves and their families are immense.

Identifying effective, sustainable ways out of in-work poverty benefits these workers, their families and the state. But for employers these pathways can amount to another significant cost pressure, to be set against a general background of competing wage demands throughout an organisation’s workforce.

Consequently, understanding how effective different anti-poverty measures are for workers, and if they are sustainable long-term measures which employers should adopt, is crucial to the in-work poverty policy debate.

The research

For organisations aiming to be an 'antipoverty employer', York research suggests a complex picture.

Professor Jo Swaffield and colleagues from our School for Business and Society analysed the impact on poverty of the Voluntary Living Wage. The team surveyed workers earning £10 per hour or less at three partner organisations: City of York Council, Joseph Rowntree Foundation/Joseph Rowntree Housing Trust and York St John University. The three organisations had recently become Voluntary Living Wage employers.

The research found that in-work poverty is not only related to the wage rate but is also inextricably linked to working hours. Low wage employment is predominantly part-time; this means that even though a person might receive the Living Wage, they may not be working the hours assumed by Living Wage calculations.

Employees receiving the Living Wage could also be in poverty because of their living situation and, in some cases, failure to claim benefits they are due. Single parents were at higher risk of deprivation of adult items such as "regular savings" and "money to repair broken electrical goods".

The research identified a range of pathways for employers to help their low-waged employees, including:

  • Consideration of their employees’ weekly working hours and whether part-time roles could be re-designed.
  • Consideration of the provision, access and engagement of the workforce to the employee benefit package provided.
  • For career progression opportunities to be underpinned by a supportive organisational structure to foster and develop confidence and aspiration.

The outcome

The three partner organisations involved in the research used the project's findings to review and reconsider their working practices, including their wage rates and policies on sharing additional overtime hours.

The organisations have also re-examined their ‘employee benefit schemes’, and the access their employees have to affordable borrowing and employer support from an anti-poverty perspective.

Featured researcher
Jo Swaffield

Jo Swaffield

Professor Swaffield is an applied micro labour economist with a track record of providing research evidence to government. Her main research fields are in labour economics and applied microeconometrics, focusing on issues such as the gender wage gap, low wages including minimum wages and the living wage, and employment.

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