Nearly two million children in lived in households where their parents or guardians earned less than the living wage last year, according to new research commissioned by Save the Children released today to coincide with living wage week.
The figure – 1.96 million, up from 1.82 million the previous year– highlights the need for employers to make work pay in order to prevent more children falling into poverty despite the best efforts of their hard-working parents.
We believe more children risk being pushed into poverty because work isn’t paying enough so we’re calling for the widespread adoption of the living wage by employers.
Paying the living wage could ease the burden on government social security spending.
Changes needed to Universal Credit
It could also improve gains and mitigate the losses to families under the new Universal Credit system.
Under Universal Credit, 1.8 million households with children will have higher entitlements and 1.7 million will have lower entitlements.
Research commissioned by our policy team reveals that among those who will be worse off are low-paid couple families where both parents work and low-paid single parents who work full-time, raising questions about the incentive to work.
We believe there should be reductions in the planned Universal Credit taper rate (the rate at which Universal Credit payments will be withdrawn as earnings go up – currently set at 65%) so families keep more in net income as earnings increase
We’re also calling for the government to contribute more to childcare costs as an incentive to work.
Making work pay
Save the Children’s UK Head of Economics, Priya Kothari, said “it’s not fair that two-thirds of children in poverty live in households where one or both parents work. That’s why we are calling for widespread adoption of the living wage.
“We know that low pay leads directly to financial pressures and difficult choices – parents choosing to be cold so that their children’s bedroom can be heated, not being able to spend enough quality time as a family – despite the best efforts of hard-working parents. Employers must do more to make work pay.”