The ‘Scandal’ of In-work Poverty Revisited

in-wor 1

A vague sense from discussions around the minimum wage that an increasingly large number of families remain in ‘poverty’ notwithstanding the fact that one or both parents is in work has been given a substantial empirical boost. Separate reports by the Department for Work and Pensions in March 2019 and the Institute for Fiscal Studies (IFS) in June 2019 both confirm that stagnant wages, rising prices and a freeze on in work benefits have combined to leave millions in what they label ‘relative poverty’. Paul Johnson, Director of the Institute for Fiscal Studies, noted that:

It’s one of the biggest social changes we’ve seen in the past 25 years. Poverty, long associated with being out of work and with old age, is now mostly a phenomenon experienced by people who are actually in work or who are living in a household where someone is in work. Back in the mid-1990s, just under 40 per cent of those in poverty, as measured against the semi-official definition of having less than 60 per cent of median income, lived in working households. Today nearly 60 per cent of those in poverty live in such a household. Of course, we can disagree about exactly what level of income constitutes a poverty line, so, if you prefer, we can just ask why it is that so many more of those towards the bottom of the income distribution now live in working households.

His comments are interesting on many levels, but for us at In Their Own Write what is most striking is the remarkably constrained timeline of the history of in-work poverty.

Johnson infers that before the mid-1990s the core of poverty was associated with old age and unemployment and he sees radical change since that point. This view is historically untenable. For much of the history of the welfare state from 1601 to 1929 and beyond, most welfare recipients worked at something and in-work poverty was the normal experience for a very significant proportion of the population. Even if Paul Johnson is right, and the later twentieth-century saw the rise of old age poverty – and there are many reasons to doubt this – the changes he traces post-1995 are merely the return to a status quo that has lasted many hundreds of years. Constructed in this manner, both the ‘problem’ of in-work benefits, and some of the potential alleviations of that situation, look different to the gloss reported above. In this sense, history really does matter.

At In Their Own Write, the intertwining of the benefit system and labour market architecture is something that is ubiquitous. Let us take, for example, the poor law union of Reeth in North Yorkshire. Reeth was a mixed rural and industrial union, and a significant proportion of its labour force was involved in mining activities. On 10 December 1847 the acting clerk for the union wrote to the poor law commissioners in relation to an informal enquiry they had made earlier in December. The Commission feared that Reeth was giving outdoor relief to the able-bodied poor in direct contravention of the principles of the act of 1834. The clerk reported the position of local guardians at length:

I forward you a list of the able bodied paupers to whom at the different periods therein mentioned they have administered out door relief under the following circumstances. The paupers therein mentioned are all, or  the very much greater majority of them Miners employed in the Lead Mines which in the Mountainous and moor Land Country in question afford to all but a very small proportion of the labouring population the only means of employment and subsistence; – The proprietors of these mines do not pay their Labourers stated wages by the week or month or by the piece, but, by what is styled amongst them trial bargains, that is one or two or a gang of men take of their employers a length of ground out of which they are to raise so much metal, at so much a bin or given quantity – three trials after the men have worked at them for probably 2, 3 and 4 months together (I have known cases of 6 months and longer) frequently turn out complete failures, and the men receive nothing for their labor in such cases having no other means of subsistence save the trifles earned by their wifes and larger children by knitting and occasional days at washing the metal[.] [I]t is manifestly impossible but that the men when after a long continued and apparently unsuccessful trial their credit at the small provision shops becomes exhausted, must apply to the union for assistance and it is almost impossible but that the Union must in such cases infringe the rule against out door relief to able bodied pay[ments] since the expense by bringing them and their families into [the] Workhouse rarely containing more than 20 Inmates would [be] ruinous as well to the Townships to which they respectively belong[,] as to the paupers themselves would thereby in all probability by being obliged to leave their working, lose any benefit they might derive from their long labor (TNA MH 12/14588).

 

Grassington lead miners 2
North Yorkshire Lead Miners, ca.1900

The sharp practices of employers, unremunerated labour, the inadequacy of wages and the precariousness of family economies because of the precariousness of work, are colourfully reported here and to all intents and purposes mirror the rhetoric surrounding the modern minimum wage and in-work poverty. The moral integrity of the people who could not make ends meet despite hard work, so much a feature of modern commentary, is also to be found here, with the acting clerk commenting that ‘The men themselves are an industrious and careful class of people and anxious so long as they can to avoid being burthersome to their Parishes[:] indeed I have known instances where any[thing] more than ‘bread’ alone was far beyond their expectation’. Equally, the union pointed to the lack of easy solutions, as do the IFS and DWP reports noted above. ‘The Board of Guardians’, their letter stated, ‘have long been fully alive to the desirableness of a change in the system of paying the Miners but they are utterly powerless to alter it.’

While allowing that the expenditure on such able-bodied men was reasonable, the ultimate solution envisaged by the central authorities also carries with it distinctively ‘modern’ undertones. Inspector Hawley wrote to his superiors that:

It is the custom in this part of the County for the proprietors of mines to let out the work to the miners upon (what they call) “trial bargains” which assist in the miner undertaking to look for ore at his own risk – if he is successful he sometimes [earns] good wages – if otherwise he is plunged into an utter state of destitution, and looks at his parish to support him till the next [spe]culation turns out more profitably – it is in face a game of [hazard] between the employers & their labourers and is the cause of constant distress of unsettled habits.

Hawley’s solution was to transfer the risk and costs of underemployment and inadequate wages on to the employers themselves:

The parish of Askengarthdale complain of the expense the man & his family are likely to cause the parish if they come into the Workhouse. This is precisely the fear which it is desirable to create, & it will cause the employers to find more constant and remunerative employment.

The current debate over the desirability and impact of companies adopting and then raising the living (as opposed to the minimum) wage resonates powerfully with this viewpoint.

Our corpus of letters and enquiries is replete with instance like this. In-work poverty – whether that work was full- or part-time – constituted a substantial core of both relative and absolute need in the period of the New Poor Law. The ‘new’ trend that the IFS and DWP report post-1995 is thus not new at all. It represents a return to the traditional overlap of work, wages and welfare. Looked at in this way, the solution to the ‘problem’ of in-work poverty might lie, not just in raising wages and insisting on a living wage, but in a much closer and more substantial understanding of the essential links between the welfare system and labour market architecture.

 

 

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