“Most children living in poverty are not from workless households”, writes the Guardian: “The number of children of working parents who are living in poverty in the UK has risen to an unprecedented 2.1 million […] accounting for 58% of the total.”

This is one of those meaningless figures which come up again and again in the poverty debate, with only the second digit changing from year to year. It is surely not the intention of the authors writing the underlying reports, but once distilled by the poverty advocacy community and certain parts of the media, the message is always: work is not a route out of poverty. Forget work. Just increase benefits unconditionally.

A crude figure of that kind would have made some sense one or two generations ago, when most people were either in work or not. What the Guardian’s 58%-figure reflects is simply the fact that since 1999 tax credit policies have been moderately successful at propelling many formerly workless parents into minor employment. The most common working hours pattern among them is a working week of 16 hours – the threshold at which parents qualify for Working Tax Credit. Far from showing that work is pointless, the figure shows that working two days a week in a low-paid job is usually not enough to raise people above the relative poverty line. Not that surprising, is it?

In addition, the figure includes about 0.4m children living with self-employed parents. For the self-employed, income poverty figures mean next to nothing because their incomes are naturally volatile.

To reveal some meaningful information, poverty figures have to be disaggregated a bit further by occupational status. They should also approximate living standards by consumption instead of income, as the index of Material Deprivation does. It then shows that child poverty clearly decreases with the degree of the parents’ labour market attachment.

(based on data from the ONS and the DWP)

Does that mean that increasing employment among the poor is sufficient to make poverty disappear? No. But it does mean that as long as employment among the disadvantaged does not increase, throwing more and more money at the problem will not make it go away.

Kristian Niemietz

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).