Low-paid jobs keep poor in poverty

The notion that the poor can pull themselves up by the bootstraps by taking available paid work is challenged in a study of life on a low income.

Though it avoids the word "underclass", the study - published by the Centre for Economic Performance at the London School of Economics - finds there is a large group of people which moves in and out of jobs but remains in poverty.

Jobs, Wages and Poverty identifies a social group, in author Paul Gregg's words, "constantly cycling between low-paid employment and worklessness".

The problem is not that these people do not want to work, but that the kind of jobs they find - often seasonal, part-time, or casual - are, by their nature, short-term, and those employed in this way will soon become unemployed again.

A "snapshot" of numbers in employment - often used by government ministers to bolster claims of economic recovery - often overstates the extent to which jobs last.

Even if more people are in employment, says the study, it does not necessarily follow that they are able to move up the income scale.

"The first rung on the jobs ladder is often extraordinarily slippery," says Mr Gregg. Over the course of a year, about half of those with the lowest incomes - those in the lowest 10 per cent income bracket - moved up in terms of their incomes. But they did not move far and were in constant danger of falling off the ladder.

Younger people in general find it easier to move off benefits and to advance up the jobs ladder. In a similar position are those who have been out of work or in a badly paid job for only a short while. Men and women whose partners have a job find it considerably easier to move back into permanent employment. Single mothers and families with adult children where everyone is unemployed find it exceedingly difficult to shake off poverty, says the study.

Government policy has recently put more emphasis on moving people out of dependence on social security and into jobs. Last autumn, income support for the unemployed was replaced by the Job Seekers' Allowance and pilot schemeshave been launched which require benefits claimants to take available work.

Mr Gregg's report claims it is not enough to get people into jobs which may not last. Government should concern itself with the second, or even third job that might be offered to a previously unemployed person.

"Employment offices should perhaps even start to think in terms of `career management', to ensure there are incentives to keep the low-paid moving up the income ladder," he says.

t Research by the Policy Studies Institute calls into question many calculations made in assessing social security benefits. Many couples live as cheaply as one person, a study found. But the cost of children, especially younger children, is often greater than allowed for in calculations for income support.