The Rise of In-Work Poverty In Britain
Britain is among the countries in Europe which has seen the highest growth of in-work poverty, resulting in 17% of all working households now considered working poor, compared to 13% in 1996. The purpose of this paper is to examine what has contributed to the rise of in-work poverty in Britain, and to discuss what policy options are available to alleviate the phenomenon. To accomplish this, four mechanisms of in-work poverty are identified on the basis of existing literature. These are housing costs, labour force attachment, employee compensation, and social benefits. It is concluded that there are several reasons why in-work poverty has increased, including a surge in self-employment, an increase in private renting, growth in non-wage compensations, and changes to social benefits. The analysis also finds that workers’ bargaining power has steadily declined, aiding the development of unfavourable employment terms and in-work poverty.This paper implies that broadening the scope of the statutory minimum wage, together with lowering the effective marginal tax rate, will enhance the effect of the planned increases to the wage floor. A shift from Britain’s current collective bargaining system to either a largely decentralised system, or a predominantly centralised and co-ordinated system, will result in better employment outcomes, lower wage inequality, increased spill-over effects, and better job quality. Increasing the use of active labour market policies and targeting low skilled workers who cycle between low paid employment and unemployment, will promote long-run labour productivity growth and reduce income disparities, but is considered both expensive and contrary to the current welfare state model
Year of publication: |
2023
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Authors: | Vinkler, Marc |
Publisher: |
[S.l.] : SSRN |
Subject: | Großbritannien | United Kingdom | Armut | Poverty | Arbeitsmarkt | Labour market | Niedriglohn | Low wages | Arbeitskräfte | Workforce |
Saved in:
freely available
Extent: | 1 Online-Ressource (50 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 2, 2022 erstellt |
Other identifiers: | 10.2139/ssrn.4353074 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014261598
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