Society
Two jobs versus no jobs
Published 09 April 2007
The effect of lone-parent families on child poverty figures is well understood. But another factor is underplayed: the polarisation between two-wage and no-wage households
The poor, the Bible warned, "always ye have with you". The truth of that has just come home to new Labour. According to the latest figures, the proportion of children below the poverty line was 30 per cent in 2005-2006, up from 28 per cent in 2004-2005, though still down on 34 per cent when Labour came to power.
Cutting child poverty was new Labour's big project. So why has poverty remained so persistent? The most important point is that the definition of poverty is a relative one: any child in a household that receives less than 60 per cent of current median income is deemed to be in poverty. It is true that, in the year covered by the latest figures, the real incomes of the poorest 20 per cent actually went down, while everyone else's went up. But that year was exceptional. If the criterion for poverty were, in terms of purchasing power, the same as when Labour came to power, the proportion in poverty would be down to 18 per cent. Progress towards eliminating poverty, therefore, depends on progress towards reducing inequality. New Labour has never quite admitted this. Typically, it tried to convince affluent voters that they could have their cake and eat it - an end to poverty at nil cost to themselves.
Running to stay still
Several economic and social factors are tending to increase inequality; new Labour has to run harder, as it were, to stay in the same place. One such factor - the growing premium for skills and qualifications in developed economies - is generally understood. New Labour thinks the answer is to raise qualifications among those at the bottom of the pile, but I am sceptical. Growing inequality of rewards may be inherent to modern job markets. It may need to be modified through government intervention - a much higher minimum wage, possibly even job subsidies - rather than through supply-side reforms. Ministers haven't helped themselves by outsourcing so many menial jobs to the private sector and marginalising the public sector unions.
The effect of lone-parent families on the figures is also understood: they account for 25 per cent of all children, 42 per cent of those in poverty. But another factor is, I think, underplayed: the increased polarisation between households that have two wages (sometimes both very high) and those that have none. As Richard Berthoud of the Institute for Social and Economic Research reveals in a new study for the Joseph Rowntree Foundation (Work-rich and Work-poor: three decades of change, published by the Policy Press), the proportion of British adults who were not themselves in employment, and did not have an employed partner either, was just 7 per cent in 1974. In 2003, it was 14 per cent.
The significance is somewhat obscured by the overall decline in couples from 81 per cent to 70 per cent of all households. But the decrease is really found in one specific type of household: the one-earner couple. This was the most common household in 1973, accounting for 42 per cent of the total. By 2003, it accounted for only 22 per cent. The incidence of every other type of household, including no-earner couples and two-earner couples, has risen.
So we have seen an enormous labour-market shift whereby women who have working partners have substituted for men who have non-working partners. I do not mean they have directly stolen men's jobs, still less that they have acted deliberately and selfishly. I merely point out that this polarisation of household incomes is the effect of 30 years of what we consider to be social progress. Many (myself included) would say the improvement in women's workplace prospects is by no means over, and nor should it be. But the effect on child poverty, which is largely outside the scope of Berthoud's study, must be substantial. Of children in poverty, 15 per cent, or 570,000, live with non-working couples.
Wives of jobless men
Many envisaged that, as feminism developed, more women would work while more men stayed at home. That hasn't happened. As Berthoud says: "Both men and women are more likely to have a job if their partner has one, and less likely if their partner does not." Indeed, though it is now socially acceptable for the woman in a couple to work even if she is also a mother, the taboo against the sole female breadwinner remains strong. A woman may have a better chance of employment than her partner, but may well fail to take advantage of this. The wives of men without jobs are not much more likely to be in work now than they were 30 years ago.
I make no criticisms of two-earner couples. But because we measure these things relatively, their existence indirectly makes it harder to reduce child poverty. I hope they will not complain too loudly if a future Labour chancellor raises taxes more boldly than Gordon Brown has done.
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