Minimum Wage Forcing Brits into Poverty

By Daniel Calloway
Published on 2 Jul 2008
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Minimum Wage Forcing Brits into Poverty

Working for the national minimum wage is no longer enough to keep your head above water a new study shows.

It is no longer possible to fund an ‘acceptable standard of living’ on the National Minimum Wage, a new study has revealed. Implying that thousands more households than previously estimated are left coping with life below the poverty line.

According to the research, completed by the Joseph Rowntree Foundation, a single person living in Britain needs to take home the pre-tax equivalent of £13,400 a year just to meet everyday costs. A couple with 2 children on the other hand need to find £26,800 a year to be able to provide the basics for their family.

Currently sitting at £5.52 an hour, the National Minimum Wage is falling far short of the £6.88 hourly wage deemed ‘necessary’ by the study to cover the basic cost of living in the UK.

What’s more, far from funding a ‘lavish’ lifestyle, this wage would be just enough to allow its recipients to "afford the basic opportunities and choices that allow proper participation in society". These include a nutritious diet, stable place to live and the occasional opportunity for socializing.

Unlike the government employed measures that calculate the basic cost of living using statistics alone, this study took a more practical approach. Basing its findings on a combination of public and expert opinion they were able to produce a more realistic view of what an ‘acceptable lifestyle’ costs. Working on the assumption that, as one participant commented "Food and shelter keeps you alive, it doesn’t make you live."

Rather worryingly this study does suggest that the government’s ‘official’ poverty line is falling short of the mark. Implying that the thousands of workers taking home the minimum wage simply aren’t earning enough to get by. 

Traditionally, only households with an annual income that's 60% below the national average have been classed as living in poverty.  However in view of this study's results it seems that many more than the 13 million individuals officially included in the governments 'poverty figure' are actually struggling through life in this way.

More worryingly still, as research for this study was compiled over the past 2 years, the results do not reflect the recent hikes in food and fuel prices. This further substantial increase in the cost of living will make it even harder for households on the minimum wage to make their already lacking income stretch to cover the cost.

The result is a situation where rising costs coupled with inadequate ‘basic’ wages are pushing an increasing number of households into ‘unofficial’ poverty. However, whether the shocking ‘real world’ findings of this study will be enough to make the government sit up and take action still remains to be seen.

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Comments (1)

Any opinions expressed below are solely those held by individual users and are not in any way endorsed by, or representative of those held by Money.co.uk. We accept no responsibility or liability for the accuracy or content of any material submitted and maintain the right to publish, remove or edit it as we see fit.
A Macmillan
3rd Apr 2009 19:10
Since the pound fell to parity with the Euro, my son,who works in Britain for a little above the Minimum Wage,is earning less than the six euros fifty generally paid to Albanian casual workers here in Greece.

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