Identifying sustainable pathways out of in-work poverty
Lead Research Organisation:
University of York
Department Name: Economics
Abstract
Summary
In a time of austerity and low economic growth the challenges faced by low-waged workers in earning enough to support themselves and their families to achieve a socially acceptable standard of living are immense. Identifying effective and sustainable pathways out of in-work poverty for these workers holds significant benefit for the workers, their families and the state. However for employers facing increasing expectations to view their employees' wage through a lens of social responsibility rather than purely productivity or market comparison, this can amount to another significant cost pressure, to be set against a general background of competing wage demands throughout the organisation's workforce. Understanding how effective different anti-poverty measures actually are for workers, and how sustainable they are as long-term measures to be engaged with by employers, is therefore crucial to the in-work poverty policy debate. A debate that is increasingly urgent as recent UK figures show in-work poverty to be currently outstripping that of poverty in workless households.
This project provides a unique and valuable opportunity for a team of social scientists from the University of York and three important employers from the York labour market to work together on an applied research project that will help employers identify the likely effectiveness and sustainability of current measures being employed to reduce in-work poverty within their organisations. The project partners are the City of York Council (CYC), Joseph Rowntree Foundation/Joseph Rowntree Housing Trust (JRF/JRHT) and York St John University (YSJU).
The research project and knowledge exchange will focus on one specific geographical labour market, York. However the challenges currently being faced by these three employers are not York specific. Therefore the investigation and development of effective and sustainable strategies to deal with in-work poverty within these three project partner organisations will have much relevance to many more employers (and workers) across the UK.
To investigate which are the most effective and sustainable policies to reduce in-work poverty the project will undertake:
1. an employer and worker level analysis of the effects of the adoption of a living wage policy within the organisation and issues relating to the sustainability of the living wage commitment. Research which will not only be supporting CYC, JRF/JRHT and YSJU in their own organisation's adoption and sustainable embedding of the living wage policy but it will also provide an important evaluation of a wage policy considered to be a cornerstone of any anti-poverty employer stance, an evaluation which will have potential value to many more organisations in the UK.
2. an assessment of the constraints and challenges currently being faced by workers from the three project partner workforces will be undertaken through the design and collection of two surveys; the first will be a survey of a sample of workers (about 500 workers) earning below a particular wage rate at the three partner organisations. The second will be a survey that follows-up a sample of workers (about 40 workers) who responded to the first survey and were found to be experiencing or at risk of in-work poverty. Both surveys will allow an assessment of how effective current anti-poverty policies engaged with by the employers actually are for the workers.
3. an analysis using national and regional data on wage distributions, wage growth, and in-work poverty over time to provide a framing or background to the discussion of which are the most effective and sustainable pathways out of in-work poverty. This analysis will help to generalise the project findings beyond the York labour market and set the experiences of the project partners' York based employees into a national context.
In a time of austerity and low economic growth the challenges faced by low-waged workers in earning enough to support themselves and their families to achieve a socially acceptable standard of living are immense. Identifying effective and sustainable pathways out of in-work poverty for these workers holds significant benefit for the workers, their families and the state. However for employers facing increasing expectations to view their employees' wage through a lens of social responsibility rather than purely productivity or market comparison, this can amount to another significant cost pressure, to be set against a general background of competing wage demands throughout the organisation's workforce. Understanding how effective different anti-poverty measures actually are for workers, and how sustainable they are as long-term measures to be engaged with by employers, is therefore crucial to the in-work poverty policy debate. A debate that is increasingly urgent as recent UK figures show in-work poverty to be currently outstripping that of poverty in workless households.
This project provides a unique and valuable opportunity for a team of social scientists from the University of York and three important employers from the York labour market to work together on an applied research project that will help employers identify the likely effectiveness and sustainability of current measures being employed to reduce in-work poverty within their organisations. The project partners are the City of York Council (CYC), Joseph Rowntree Foundation/Joseph Rowntree Housing Trust (JRF/JRHT) and York St John University (YSJU).
The research project and knowledge exchange will focus on one specific geographical labour market, York. However the challenges currently being faced by these three employers are not York specific. Therefore the investigation and development of effective and sustainable strategies to deal with in-work poverty within these three project partner organisations will have much relevance to many more employers (and workers) across the UK.
To investigate which are the most effective and sustainable policies to reduce in-work poverty the project will undertake:
1. an employer and worker level analysis of the effects of the adoption of a living wage policy within the organisation and issues relating to the sustainability of the living wage commitment. Research which will not only be supporting CYC, JRF/JRHT and YSJU in their own organisation's adoption and sustainable embedding of the living wage policy but it will also provide an important evaluation of a wage policy considered to be a cornerstone of any anti-poverty employer stance, an evaluation which will have potential value to many more organisations in the UK.
2. an assessment of the constraints and challenges currently being faced by workers from the three project partner workforces will be undertaken through the design and collection of two surveys; the first will be a survey of a sample of workers (about 500 workers) earning below a particular wage rate at the three partner organisations. The second will be a survey that follows-up a sample of workers (about 40 workers) who responded to the first survey and were found to be experiencing or at risk of in-work poverty. Both surveys will allow an assessment of how effective current anti-poverty policies engaged with by the employers actually are for the workers.
3. an analysis using national and regional data on wage distributions, wage growth, and in-work poverty over time to provide a framing or background to the discussion of which are the most effective and sustainable pathways out of in-work poverty. This analysis will help to generalise the project findings beyond the York labour market and set the experiences of the project partners' York based employees into a national context.
Planned Impact
Who will benefit
Identifying effective and sustainable pathways out of in-work poverty holds significant benefit for workers, their families, employers and the state. Those directly benefitting from this project will be workers at City of York Council (CYC), Joseph Rowntree Foundation/Joseph Rowntree Housing Trust (JRF/JRHT) and York St John University (YSJU) and in particular those employees with wage rates between the national Living Wage rate and the JRF's Minimum Income Standard (MIS) rate for single persons and 'two earner couple with two children'.
Also directly benefiting from this project are the project partner employers CYC, JRF/JRHT and YSJU as there will be a direct benefit to the employers in terms of improving knowledge on how to best direct policies to reduce in-work poverty and it will also directly support CYC, JRF/JRHT and YSJU in their own organisation's adoption of an effective and sustainably embedded Living Wage policy.
Locally within the York labour market there will be benefit through shared best practice to both employers and their workforces on policies to reduce in-work poverty. Regionally the same point will also hold and in particular there will be value to other regional local authorities (e.g. Newcastle and Sheffield and who like York have run 'Fairness' commissions) who also currently addressing the serious challenge of how to make the Living Wage commitment sustainable.
Nationally beneficiaries will include; Employer groups including the Chartered Institute of Personnel and Development (CIPD), Confederation of British Industry (CBI), Federation of Small Businesses and Business in the Community, Universities Human Resources (UHR), University and Colleges Employers Association (UCEA), and the GuildHE; Trade unions including the Trade Unions Congress (TUC) and UNISON; Central government departments including HM Treasury, Department for Business, Innovation & Skills (BIS), Department of Work and Pensions (DWP), Department for Communities and Local Government (DCLG) and also the Low Pay Commission (LPC); Poverty and Living Wage campaign/ research groups including Institute for Public Policy Research (IPPR), the Resolution Foundation, Work Foundation, the Living Wage Foundation, Citizens UK, Trust for London, Zacchaeus Trust and Child Poverty Action Group (CPAG))
How will they benefit
The project will have demonstrable impact through being; instrumental in directly affecting the development of employer based policy and best practice in relation to 'in-work poverty' within each of the project partner organisations, and also specifically on the sustainable embedding of the Living Wage policy; conceptual as the applied research project will make a contribution to the deeper understanding of policy issues relating to in-work poverty and the adoption of voluntary wage floors. Indeed the research project will extend or reframe the debate centred on the Living Wage, to become broader, encompassing additional in-work poverty measures that employer could engage with; and capacity building through the collaboration and knowledge exchange between the research team and the project partners, allowing a two-way exchange of knowledge and experience between the researchers and employers as practitioners.
In terms of the timeline of the beneficial impact there will be immediate impact during the 12-month project due to the continuous engagement with the project partners. At the end of the project period there will be a public/invited workshop which will present the research findings and share best practice from the research team and project partners with an audience of interested groups. To achieve longer-term impact the findings will be disseminated through policy-related and academic engagements, academic publication, and by the research team encouraging and supporting the project partners in their own dissemination within relevant international, national and local professional networks.
Identifying effective and sustainable pathways out of in-work poverty holds significant benefit for workers, their families, employers and the state. Those directly benefitting from this project will be workers at City of York Council (CYC), Joseph Rowntree Foundation/Joseph Rowntree Housing Trust (JRF/JRHT) and York St John University (YSJU) and in particular those employees with wage rates between the national Living Wage rate and the JRF's Minimum Income Standard (MIS) rate for single persons and 'two earner couple with two children'.
Also directly benefiting from this project are the project partner employers CYC, JRF/JRHT and YSJU as there will be a direct benefit to the employers in terms of improving knowledge on how to best direct policies to reduce in-work poverty and it will also directly support CYC, JRF/JRHT and YSJU in their own organisation's adoption of an effective and sustainably embedded Living Wage policy.
Locally within the York labour market there will be benefit through shared best practice to both employers and their workforces on policies to reduce in-work poverty. Regionally the same point will also hold and in particular there will be value to other regional local authorities (e.g. Newcastle and Sheffield and who like York have run 'Fairness' commissions) who also currently addressing the serious challenge of how to make the Living Wage commitment sustainable.
Nationally beneficiaries will include; Employer groups including the Chartered Institute of Personnel and Development (CIPD), Confederation of British Industry (CBI), Federation of Small Businesses and Business in the Community, Universities Human Resources (UHR), University and Colleges Employers Association (UCEA), and the GuildHE; Trade unions including the Trade Unions Congress (TUC) and UNISON; Central government departments including HM Treasury, Department for Business, Innovation & Skills (BIS), Department of Work and Pensions (DWP), Department for Communities and Local Government (DCLG) and also the Low Pay Commission (LPC); Poverty and Living Wage campaign/ research groups including Institute for Public Policy Research (IPPR), the Resolution Foundation, Work Foundation, the Living Wage Foundation, Citizens UK, Trust for London, Zacchaeus Trust and Child Poverty Action Group (CPAG))
How will they benefit
The project will have demonstrable impact through being; instrumental in directly affecting the development of employer based policy and best practice in relation to 'in-work poverty' within each of the project partner organisations, and also specifically on the sustainable embedding of the Living Wage policy; conceptual as the applied research project will make a contribution to the deeper understanding of policy issues relating to in-work poverty and the adoption of voluntary wage floors. Indeed the research project will extend or reframe the debate centred on the Living Wage, to become broader, encompassing additional in-work poverty measures that employer could engage with; and capacity building through the collaboration and knowledge exchange between the research team and the project partners, allowing a two-way exchange of knowledge and experience between the researchers and employers as practitioners.
In terms of the timeline of the beneficial impact there will be immediate impact during the 12-month project due to the continuous engagement with the project partners. At the end of the project period there will be a public/invited workshop which will present the research findings and share best practice from the research team and project partners with an audience of interested groups. To achieve longer-term impact the findings will be disseminated through policy-related and academic engagements, academic publication, and by the research team encouraging and supporting the project partners in their own dissemination within relevant international, national and local professional networks.
Publications
Schweinzer P
(2014)
What's in it for the firms? Living Wage adoption as signal of ethical practice
Swaffield JK
(2017)
AN EVALUATION OF THE LIVING WAGE: IDENTIFYING PATHWAYS OUT OF IN-WORK POVERTY
in Social Policy and Society
| Description | The knowledge exchange project centred on: the design and analysis of a structured quantitative poverty survey; a follow-up qualitative survey; and an analysis of the Living Wage implementation at the three partner organisations. In-work poverty and role of the Living Wage (LW) LW workers are at greater risk of in-work poverty than those employees further up the wage distribution, however risk was experienced across the distribution analysed (employees earning up to £10 per hour) and many LW recipients did not live in households in poverty. Workers at risk of in-work poverty have shorter working hours per week (on average), and workers at risk of in-work poverty are more likely to report a preference or desire for more working hours. Employees were supportive of the LW policy that had been adopted at their organisation. For those receiving the LW directly it was welcomed and more than half reported that it made a positive difference to them in terms of their financial circumstances. There was a clear understanding that the extent of the LW impact was a function of hours worked, and this would limit any benefit. Additional pathways out of low-pay Additional pathways investigated to support low-paid employees included consideration of the remuneration packages or employee benefit schemes run in the organisations. There was compelling evidence that the composition of the benefits under these schemes, the methods of communication internally around them, and the confidence employees had in accessing them significantly reduced the value of the benefits for the lower-waged groups in the workforce. Career progression was also considered as a route out of low-pay. In a series of direct question about aspirations and progression, more than half of the sample responded that they were not looking for progression. The follow-up qualitative interviews provided some useful context to these findings. For example, that a lack of confidence in themselves, and their skills by lower-waged employees might explain lack of engagement with 'career advancement' when offered. The benefit entitlement checks on 40% of completed surveys undertaken by the Welfare Benefit Unit (WBU) in York suggested that roughly 28% of employees were under claiming on benefit entitlement in summer/autumn 2014. Also, within those respondents (c.20%) reporting receipt of working and/or tax credits, there was a higher level of employees receiving the LW. Sustainability of the Living Wage policy Implementation of the LW policy has presented challenges at all three organisations but arguably the more significant issues arise around the longer-term embedding or sustainability. Early evidence suggests that for the LW to be fully embedded requires; organisation leads to have a high-level principled commitment to the policy, as well as a deep understanding of what the policy will mean for their organisation in 5-8 years time; and for senior HR colleagues to not only understand the wage policy but be fully committed to its success, as on-going innovative thinking around internal pay structures, wage growth across the distribution and productivity changes will be critical to sustainability. Summary Our key findings suggest a complex picture for organisations to engage with if the aim is to be an 'anti-poverty employer'. The risk of in-work poverty relates not only to the wage rate but is also inextricably linked to the working hours. We suggest that employers might wish to engage in a range of additional pathways to help low-waged employees including: • consideration of their employees' weekly working hours and whether current jobs could be actively re-designed in this dimension e.g. stitching together part-time roles, into more significant employment, • consideration of the provision, access and engagement of the full workforce to any employee benefit package provided, and • where career progression is promoted as an answer to low-pay that an underpinning and supportive organisational structure to foster and develop confidence and aspiration within the group it is aimed at is also provided. These key findings do not make a case against adopting LW rather they highlight that the effectiveness of the LW as a tool against poverty will be greatest when combined with other measures. Indeed, and as has been noted by other researchers previously it may well be that the LW's greatest contribution to poverty alleviation is actually through a galvanising concept for social campaign and justice. |
| Exploitation Route | The findings from our knowledge exchange project should be helpful to a range of policy researchers and HR practitioners that are interested in the question of in-work poverty, and specifically in relation to what employers can do to effectively reduce the risk of in-work poverty with their own workforces. Specifically on this we have suggest that employers might wish to engage in a range of additional pathways to help low-waged employees including: • consideration of their employees' weekly working hours and whether current jobs could be actively re-designed in this dimension e.g. stitching together part-time roles, into more significant employment, • consideration of the provision, access and engagement of the full workforce to any employee benefit package provided, and • where career progression is promoted as an answer to low-pay that an underpinning and supportive organisational structure to foster and develop confidence and aspiration within the group it is aimed at is also provided. |
| Sectors | Communities and Social Services/Policy,Government, Democracy and Justice,Other |
| Description | The ESRC knowledge exchange (KE) project has centred on the design and analysis of a structured quantitative poverty survey, and follow-up qualitative survey. The knowledge exchange has provided information on employer actions that might be engaged with as part of an 'anti-poverty strategy' that includes, but is not limited to the adoption of the voluntary 'Living Wage' policy. Initial impact of our KE project has been focused within our three project partner organisations and how they have responded to our findings and suggestions for considering additional 'pathways' out of low-pay. The key findings of the research project have been shared through external engagement and collaboration with the project partners on an ongoing basis throughout, and after the project period. Illustrative examples of the embedding and/or further thinking at the three projects partners, either instigated or informed by our KE project includes: all three partners reviewing and/or considering further how the 'employee benefit schemes' operate at their organisations (composition, communication/access and staff confidence in uptake); one of the three project partners has reviewed how additional overtime hours are shared across employees proving social care; one of the three partners has reviewed workplace cleaning rotas to re-consider the need for 'invisibility' of the activity; and access to affordable borrowing and support for savings to all employees has been provided at one of the project partners since the end of the KE project. A detailed summary of the follow-on effect of the key findings at the three project partners is provided in the main report on pages 155 and 156. In addition to the research impact at the three partner organisation the project's PI has presented and/or made contributions to the following meetings/organisations based on the project's key findings: York Fairness and Equalities Board, September 2016 The Living Wage: Reviewing and realigning the rates - Resolution Foundation, February 2016 Low Pay Commission Research Workshop, September 2015 Health Inequalities in Hull - Hull City Council, July 2015 |
| First Year Of Impact | 2016 |
| Sector | Government, Democracy and Justice |
| Impact Types | Societal |
| Description | Government Equalities Office (GEO), Cabinet Office: Workplace and Gender Equality Research Programme Seminar 3: Women in Low Paid and Low Skilled Roles. April 2019 |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Expert academic panel to discuss Women in Low Paid and Low Skilled Roles as part of the Government Equalities Office (GEO), Cabinet Office programme of research and thinking around what employer can do. |
| Year(s) Of Engagement Activity | 2019 |
| URL | https://equalities.blog.gov.uk/2019/05/09/is-the-number-of-women-in-low-skilled-and-low-paid-roles-d... |