Hand to mouth: Northern Ireland’s poverty outlook
A fifth of the UK population lives in poverty.
The Joseph Rowntree Foundation this week released a reporting detailing how around 14 million people here live below the poverty line, including eight million working-age adults, four million children and 1.9 million pensioners.
UK Poverty 2017 found that more than half of these people – eight million in total – live in families where at least one person is in work. One in eight workers, 3.7 million people, live in poverty.
In Northern Ireland, a lack of qualifications is an issue. In 2016, NI had the lowest proportion of working-age adults with a degree-level qualification, at 23% (compared with 30% in England, 29% in Scotland and 24% in Wales) and also by far the highest percentage of working-age adults with no qualifications – 16%, close to double everywhere else (9% in both Wales in Scotland, and 8% in England).
This is extremely worrying given, as the report says: “Those with no or low skills are far more likely to be in poverty than those with higher levels of skills.”
Per the JRF: “Over the last 20 years, the UK has dramatically reduced poverty among people who had traditionally been most at risk – pensioners and certain types of families with children. But that progress is beginning to unravel; poverty rates for both groups have started to rise again.
“The analysis highlights that the three factors which have led to a fall in poverty and are now under question; state support for many of those on low incomes is falling in real terms, rents are increasing, and rising employment is no longer reducing poverty.”
Northern Ireland’s low rates of degree-level qualifications, and high proportion of people with no qualifications, are both significant factors in local poverty.
People with better qualifications (to degree level, in particular) are much more likely to have a job. Once in a job, they are also much more likely to have higher pay – which is increasingly relevant as work becomes less effective at lifting individuals and their families above the poverty line.
“In 2016, around 86% of working-age people educated to degree level were in employment, compared with around 44% of those with no qualifications… Those people without qualifications are at a greater disadvantage in the labour market than used to be the case… the proportion of people with the highest level of qualifications has increased greatly, but the benefit of having a high-level qualification in relation to getting a job has remained.
“For full-time workers, pay increases at each level of qualification. In contrast, part-time workers with the equivalent of GCSEs or A-levels are paid almost the same as those with no qualifications at all; it is not until they have higher education qualifications that their pay seems to rise significantly.
Northern Ireland has a slightly lower rate of poverty than Wales, which is the most impoverished region in the UK. When it comes to qualifications and education, we do not appear well equipped to improve this situation.
Possibly the most worrying part of the report concerns the NEET group – young adults not in education, employment or training.
In 2017, 10% of people aged 16 to 24 in the UK were not in education, employment or training, falling from 14% in 2007 – including overall falls in England (nearly 14% to just over 10%), Scotland (just over 12% to just over 9%) and Wales (about 15% to about 9.5%).
In 2007, Northern Ireland had a lower proportion of 16- to 24-year-olds who were NEET than England, Scotland and Wales, at just under 10%. Now it has a higher proportion, and it also the only area which has seen a rise in this percentage over the last decade. It currently stands at over 12%.
The knock-on effects of poverty are considerable. In Northern Ireland, young people from poorer backgrounds are about a third less likely to achieve good qualifications at age 16 - 5A*-C grades at GCSE, including English and maths - than their peers (which is similar to England, better than Wales but worse than Scotland).
Factors helping to entrench this problem inter-generationally then come in to play: “Since 1996, there has been a large decrease in the proportion of working-age people with no qualifications and an increase in the proportion with higher education and degree level qualifications. By 2016, less than one in 10 working-age adults in England, Scotland and Wales had no qualifications, a reduction of more than half… Northern Ireland stands out as having the highest proportion of adults with no qualification (30%) in 1996, and still having a much higher proportion in 2016 (16%), despite a reduction of nearly half.
“Since 1996, the proportion of working-age adults with higher education qualifications has nearly doubled in England, Wales and Scotland; 45% of working age adults in Scotland, 38% in England and 35% in Wales have these qualifications. In Northern Ireland, the proportion with higher education qualifications was the lowest in 1996 (at 17%) and remained the lowest in 2016 (at 31%).”
While one of the key findings of recent JRF research is that having a job is less and less of a guarantee that you will not be affected by poverty, that does not mean that not having a job has become a great situation.
People will poor educational attainment are more likely to end up in poverty which increases the chance their own children will have poor educational attainment.
The JRF paper looked at the link between eligibility for free school meals (FSM), specifically, and educational attainment but the data set was small, only over a handful of years, with a change of eligibility criteria in that middle of that period.
So, while trends over time are impossible to measure, the attainment gap for children achieving good GCSEs was still huge: children eligible for FSM were just over half as likely to get good GCSEs under the old criteria, rising to roughly two thirds as likely under the new eligibility rules.
All this, of course, brings us back to NEETs and the concerns outlined in the section above.
Given our economic future is a series of uncertainties rather than clear prospects, it is unsurprising that this report is not a happy one and concludes in concerning fashion.
This article focuses on work and qualifications, and the dynamics between them and how they affect poverty.
Other factors – such as parenthood, for example, with the cost of childcare, provision of child tax credits; or the cost of the private rental sector, an increasing issue for NI given our social-housing shortage – are also relevant to how much strain is placed on family finances.
The report also examines links between poverty and mental health, which is an extensive problem here, but said further analysis is required to look at the relationships between income groups and prevalence of mental ill health in NI.
Worryingly, while the JRF is able to list a couple of things that could help – enabling people in poverty to improve incomes and reduce costs, and addressing the negative impacts of low incomes – these are merely just negations of the factors driving increasing poverty, and precisely how these could all be feasibly and quickly achieved is less clear.
“The prospects for solving UK poverty are worrying. The continuing rise in employment is no longer leading to lower poverty. Changes to benefits and tax credits for working-age families are reducing the incomes of many of those on low incomes. High housing costs continue to reduce the incomes available for those in poverty to meet other needs. Inflation is rising and is higher for those on lower incomes than for better-off groups. This squeeze on living standards is also storing up problems for the future; a fifth of people on low incomes have ‘problem debt’; most are not building up a pension; the decreasing proportion of the working-age population buying their own home means that in the future more older people are likely to rent and have higher housing costs in retirement.
“The UK has seen considerable success in improving skills and increasing employment. However, the majority of young people from disadvantaged backgrounds still do not achieve five good GCSEs and there is still a group of adults with no or low qualifications who are at an increasing disadvantage in the labour market. Part-time workers are particularly vulnerable to poverty, with a poverty rate more than twice as high as full-time workers, and qualifications are far less effective in improving their pay prospects than for full-time workers.
“The impact of poverty on physical and mental health and on relationships within families add to the disadvantages facing those living on low incomes. Enabling those in poverty to improve their incomes and reduce their costs, as well as addressing the negative impacts of low incomes, would help to prevent future poverty.”
Northern Ireland is not well placed to respond to current trends in poverty, given our levels of qualification and the shocking rise in the number of young people who are NEET.
However, while these matters are still extremely worrying, the fact that work does not really pay for so many people in employment is perhaps the chief worry.
Locally, we need to find a way to improve the qualifications of our population as a whole. More generally, working with Westminster – and maybe further afield – the scourge of in-work poverty itself also needs to be tackled.
Otherwise, as things stand, the poverty picture is set to get worse.
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