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IS POVERTY INCREASING?

Getting a job has always been seen as the best way to get out of poverty but in recent years the level of poverty amongst people who are working has increased. The spread of low pay and short-term contracts are just some of the reasons why people with jobs are now experiencing higher levels of poverty.


One difficulty lies in the real value of pay as the cost of living increases and people’s disposable income falls in a pattern that looks set to continue in the future.

Another difficulty is the nature of work in the 21st century as fewer jobs offer security, attractive terms and conditions, opportunities for promotion, or the potential of a stable career.

The economy is recovering and starting to create jobs but many are low-paid and low-skilled and provide little of the elements needed for long-term planning.

The growth of such jobs is bad for the economy as well as for the people employed within it, as profit and poverty struggle to coexist.

One way to address the issue is to improve the training, skills, education and career advice offered in schools and colleges, as better qualifications lead to better pay.

Another proposal suggests the introduction of a ‘living wage’ to reflect the cost of living rather than the minimum wage, which can act as a threshold for low pay.

Other elements such as the demand for specific skills, the rate of economic growth, the effect of technology, the relative tax rate and welfare supports all have a role to play.

The biggest issue, however, is the growth of a two-tier labour market: those with high-skilled, high-paid jobs and those with low-skilled, low-paid jobs.

In this context, the new economy is often described as a ‘hour-glass’ or ‘hollowed-out’ economy, as traditional middle-level jobs are lost to the effects of technology and globalisation.

The development of a two-tier economy is likely to continue, as the impact of such trends is felt and the number, type, profile and structure of jobs is affected.  

Regardless of how the new economy is described or how much it grows, there is little doubt that the issue of working poverty will increase unless solutions are found.

SO, the economy is recovering and creating many new jobs but poverty is spreading to include those in work and those out of work.

What do you think?
Is poverty increasing?

I look forward to your comments.

Nicholas O’Sheil
About the Author

Nicholas O’Sheil

I have worked throughout Europe, most recently in Turkey to advise on the development of an enterprise network. I am a member of the Institute of Directors, a Fellow of the Chartered Management Institute and have received the Queen’s Award for outstanding contribution to enterprise in 2008.

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