Why do people end up in poverty?

In the UK, the rate of unemployment is at its lowest level since 1974 and employers are struggling to recruit. Some people on Easy Street say that people are only poor because they’re lazy and they like living on benefits. But no one who needs to survive the current UK social security system would endorse such a viewpoint.

So, why do people need social security support? Well, here are a few examples:

• More than half of all people in receipt of Universal Credit are working but low paid.
• Ill health and disability can happen to anyone.
• Caring responsibilities for children, elders and disabled household members can be difficult or impossible to fit around a steady job.
• Some people have limited qualifications or skills that make it hard to navigate systems and get a break.
• Others have chaotic lives and ingrained problems that need intensive support to turn things around.

A good society would meet the different needs of all its citizens with the aim of giving everyone a chance to flourish for the good of all. But the UK as a society is unwell. Rates of long-term sickness are soaring and those escalating figures do not capture the whole story. Many people are incorrectly deemed to have capacity to work when they do not. 70% of appeals against being found fit for work result in a revised decision. The stress involved in challenging that decision is immense and some people just do not have the resources to fight anymore.

But if you are fit for work and looking for a job, you can claim Universal Credit. This is how much you’ll be able to claim

If you’re not familiar with the benefits system, be sure you don’t mistake this for the weekly amount. That’s how much you’ll have to live on for a month. From this you’re expected to pay your energy bills, buy food, pay for your phone (which you need for UC), travel costs to get to the Jobcentre or interviews or just to the supermarket, and household costs like the laundrette, toilet roll, or lightbulbs. And if you have existing debts and payment plans you have to pay them from this amount. And remember you won’t get anything at all for the first 5 weeks. If you take an advance to cover those 5 weeks, that money will be deducted from future payments so you’ll have even less! These sums do not add up. It’s a cruelly impossible task.

But imagine you get a job – things should be better! You’re working 37 hours a week and you’re paid £9.50 an hour. After deductions, you’ll have about £1335pcm. Here’s what you might spend it on.

You’ve got £80 left. Nothing has gone wrong this month. You haven’t dropped your phone, your microwave hasn’t given up the ghost. You haven’t had to pay for a prescription. You definitely haven’t had to take time off sick. If you were off sick you’d get nothing for the first 3 days and then you’d get under £100 per week. Your budget is destroyed if you get sick. You’ve also had no fun. You’ve not bought a magazine, you’ve no subscriptions or streaming services, you definitely haven’t been out for a drink, a meal or to the cinema, you’ve done nothing at the weekend. And remember, you’ve been working full time. Perhaps you’re working as a carer – a physically and emotionally demanding job. But you’re not allowed to get sick, and you’re not allowed any small treat, and you’re not allowed to have any bad luck or make any mistakes. If anything goes wrong, you’re into debt and there’s nothing extra to put aside to get you out of that hole. Once you’re in debt, the situation just spirals. You’re working full time at a demanding job, a job our society needs people to take on, and you’re at significant risk of falling into poverty. 

And you’re lucky to be working full time.  Sometimes employers don’t offer full time hours – they want you when they want you, and they offer you shifts to suit them.  You fit in because you need the work but it’s hard to take on another job because your hours change around.  If you lose 10 hours a week, you still won’t qualify for benefits but your earnings won’t be enough to get by.  If you have children, you might have no option but to work part-time.  You’ll get social security payments – at least for two children! – but of course children do eat and wear clothes and involve a lot of laundry and ideally they’d have some toys and books and days out.  The money you’ll get won’t cover that.  Children in single parent households are at the greatest risk of living in deep poverty.

Nobody chooses to live in poverty or on the edge of poverty.  And in our wealthy society, there is no reason why anybody should.  UK benefits need to be uprated to cover realistic living costs for people who cannot work, or cannot work full-time.  Wages should be higher because nobody working full-time should need financial support.  People with barriers to finding and keeping work need intensive support to help them progress, not sanctions and punishments that create more problems. 

The systems we live under did not arrive as a law of nature.  They can change and they must.