Tracy Shildrick, Robrt MacDonald, Colin Webster and Kayleigh Garthwaite, Poverty and Insecurity: Life in low-pay, no-pay Britain

by | Nov 22, 2013 | Opinion

Tracy Shildrick, Robrt MacDonald, Colin Webster and Kayleigh Garthwaite, Poverty and Insecurity: Life in low-pay, no-pay Britain, Policy Press, 2012, v + 256 pp, pbk, 1 847 42910 0, £26.99, hbk, 1 847 42911 7, £70

There is no better way to learn about the effects of the UK’s employment market and its tax and benefits system than to hear people tell their stories; and the stories that we hear are stories of the ‘precariat’ (Guy Standing, The Precariat, Bloomsbury, 2011): people whose lives are characterised by precarious employment – if any – and by the resulting precarious income. The back cover of the book says that ‘this book is the first of its kind to examine the relationship between social exclusion, poverty and the labour market’. Not true. Trapped in Poverty: Labour-market decisions in low-income households, by Bill Jordan et al (Routledge, 1992), followed similar qualitative methods and told a similar story: similar, but not the same, because comparing the two books shows that today many individuals and households are in a far more precarious situation than the households that Jordan and his colleagues interviewed on an Exeter local authority estate twenty years ago. (Trapped in Poverty is not in Poverty and Insecurity’s bibliography.)

Poverty and Insecurity’s first substantive chapter, chapter 2, describes the book’s ‘dynamic’ approach to poverty: that is, an approach that studies how people move in and out of poverty. (Here Ruth Lister’s Poverty, published in 2004, ought to have been referenced.)  The authors discuss recurrent poverty, low paid work, the low-pay, no-pay cycle, precarious work, and poor work, all of which appear throughout the book. They discuss the precariat and find that its growth is largely due to workers being ‘bumped down’ from higher-skilled to lower-skilled jobs; and that one of its most significant features is the high transaction costs experienced when people lose a job: a period of no income while benefit claims are processed, leading to debt, and then to unrepayable debt. A brief history of our means-tested and demeaning benefits system leads to the conclusion that the benefits system contributes to the poor quality of low paid jobs.

Chapter 3 describes Middlesbrough, where the research was carried out, and also describes the qualitative method; and chapter 4 describes employers’ and ‘welfare to work’ agencies’ perspectives on the low-pay, no-pay cycle, and finds that such agencies have little contact with people who are regularly in and out of work because their schemes are designed to cater for the long-term unemployed.

Chapter 5 finds that low paid and insecure jobs lead to more of the same and are not stepping stones to better jobs; and interestingly that this difficult experience does not dim people’s work ethic. Chapter 6 discovers that qualifications might or might not be a road to good jobs, and that most insecure jobs are obtained through friendship networks (an efficient method for both employers and employees when the job might not last very long). Chapter 7 finds that the main drivers of the low-pay, no-pay cycle are the supply of insecure employment and workers’ willingness to accept it; chapter 8 discusses the circular relationship between illness and poor jobs, and the similar relationship between caring responsibilities and poor jobs; and chapter 9 concludes that ‘neither work nor welfare protected the interviewees from poverty’ (p.189).

Chapter 10 concludes that work is not necessarily a route out of poverty, largely because there is a plentiful supply of low-skilled, short term employment, and workers are willing to apply for such jobs. The result is a lot of people in a low-pay, no-pay cycle, and therefore socially excluded core members of the precariat.

Most of the book is well-evidenced diagnosis. The final few pages are prescription: better jobs, by paying a living wage and improving conditions; and poverty reduction by increasing the level of benefits. The authors find the benefits system to be moving in a punitive direction. Two myths that the authors tackle are that benefits are too high and that the poor do not wish to work. Neither is true.

The authors ask for a ‘welfare system that promised social security not greater insecurity’ (p.223) – a good description of a Citizen’s Income.

The Economist. “Cash to the poor, Pennies from heaven: Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty”

by | Nov 10, 2013 | Research

 

The Economist

The Economist

The evidence that simply giving cash to the poor and vulnerable households is successful is well accepted by those familiar with the BI.  Elsewhere, in more mainstream debate this recognition has lagged somewhat behind the empirical evidence, until now where a change seems to be afoot. A recent article in The Economist: “Cash to the poor: Pennies from heaven” charts both the origins of cash transfers (both in their unconditional and conditional forms), and most importantly gives its seal of approval that giving cash, when combined with wider measures, is an effective way forward for addressing inequality and poverty.

The article reaffirms the overwhelming evidence that giving cash improves key human development incomes (increased vaccinations and school attendance/attainment), spending money on improved living conditions, bolsters psychological well being (e.g. reduced levels of the stress hormone cortisone in the blood of recipients), depicts positively the capabilities of the poor by illustrating how transfers unlock and resource their economic potential, resulting in increased micro-economic activity and entrepreneurialism.

However, the article goes far beyond this, showing a nuanced understanding of the different outcomes generated by the incentives of soft and tough conditions (the latter credited with giving more significant results); the fact that pilot projects or one-off basic income-type transfers from Google or Facebook (as has occurred recently via ‘GiveDirectly’ in Kenya), might distort relations between recipient and non-recipient villages therefore skewing regional developmental goals. Moreover, from a Real Politick position the article also recognises the important strategic complementarity between conditions and cash and therefore political viability: conditions are the easiest way to assure political support by reassuring middle-class taxpayers that the poor are not violating the ‘norm of reciprocity’ through something-for-nothingism. And perhaps most importantly it lends weight to emerging concerns about the tendency of politicians and media to transform  ‘shame’ and cash transfers into an ironclad collocation, especially in OECD countries, by dispelling this idea: ‘[UCTs] dent the stereotype of poor people as inherently feckless and ignorant’. In short, the article represents something of a popular breakthrough in legitimising cash transfers, whether they be unconditional or the ‘soft’ and ‘tough’ conditional variants.

The Economist, “Cash to the poor, Pennies from heaven: Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty”, The Economist, October 26, 2013.

Matt Bruenig, “How a Universal Basic Income Would Affect Poverty”

by | Oct 25, 2013 | Research

[Craig Axford]

This short blog post provides an overview of the basic income guarantee idea along with an easy to use calculator that enables visitors to calculate the cost of providing everyone in the United States with a basic income.  By experimenting with the calculator tool it’s possible to see how much various basic income levels will decrease poverty and how much of GDP the program will cost.

Matt Bruenig, “How a Universal Basic Income Would Affect Poverty,” Policy Shop, October 3, 2013.

POLICYSHOP

POLICYSHOP