Purpose

Is it fair that a hard working family still can’t meet their bills? Is it right that when you’re living month-to-month, your shifts (and income) can change last minute? What happens if you’re sick - and don’t get paid? Working poverty is a real problem in the UK today, and the solution cannot just be welfare top-ups. We’re launching a new Learning Lab that will look at how employers in the private sector can address poverty in their own workforces. Working with churches, businesses and workers, we can raise the standards for good employment—and keep families out of poverty.

The purpose of this Learning Lab is to address working poverty in the UK by exploring how employers in the private sector can take responsibility for addressing poverty within their own workforce. Based on the idea that ‘no-one who works should have to live in poverty’, we will work with churches, businesses and workers to develop a new ‘Fair Pay Commitment’, which would define a decent ‘minimum’ for responsible employers to sign up to.

The aim of this Pilot Project is to shape what ‘good’ looks like in relation to employer responsibilities and clearly define a ‘standard’ which could be widely promoted. The Lab will draw on biblical research for clear theological foundations. The ‘commitment’ will then be shaped by working with churches, workers and businesses in three different places in England and will include the real Living Wage, decent sick pay, fixed working hours and other practical features. We are aiming to report by early 2023.

The Issue

Today, we have the highest recorded level of working poverty for a generation. A significant number of households in the UK live in poverty today; many of these include working people. The nature of poverty has changed in the UK in recent decades and now the majority of people in poverty are actually also in work. For many people today, work just doesn’t pay; they work hard but they and their families still live in poverty. Something has gone badly wrong.

Some 17% of people in working households in the UK currently live in poverty (2019/20 data from IPPR, 2021). There are a number of reasons for why some are experiencing low pay today:

• Low hourly pay - Nearly 5 million jobs (about one in six) in the UK pay below the Living Wage – an independently calculated hourly wage which defines where the poverty line is. In London, the Living Wage is currently £11.05 per hour, and outside of the London it is £9.90 per hour. The Government’s Minimum Wage (the ‘National Living Wage’), despite welcome recent increases, is still below the real Living Wage, particularly in London and also for younger workers under 23 years of age.

• Unpredictable pay – Many low paid workers are on zero-hours contracts and rely on shift work which can often be changed at short notice, leading to unpredictable incomes from week to week. A recent study found that 50% of low paid workers had less than 7 days’ notice of their shift patterns, often requiring short-notice changes to travel or childcare plans which can often add to their costs.

•  Underemployment – Many workers, even those earning the Living Wage per hour may not have enough work each week to keep out of poverty. For some, lacking sufficient work is a key problem.

•  Holes in the floor – The UK’s statutory floor for sick pay is one of the lowest in Europe, with Statutory Sick Pay not applying at all to those on the lowest pay and only kicking-in on the fourth day for most others. This means that when people fall ill they face a tough choice between staying at home and earning no money at all or trying to go to work, potentially causing harm to themselves and sometimes others.

The result of all of these factors is record numbers of people working hard but continuing to live in poverty. There is plenty of evidence that this in turn leads to stress, negative impacts on health and wellbeing and also that it undermines family life. One in four parents on low pay say it impacts on their relationships with their children. For some, their income is so low it leads to hunger; one in six of the 700,000 people using a foodbank in 2019/20 were actually working. 

The accelerating cost of living crisis looks set to make this situation significantly worse as inflation is currently rising to its highest level for 30 years. The extent, and the social cost, of working poverty in the UK today is a national problem which needs addressing urgently.

A Jubilee Vision

We have developed a clear and powerful theological reflection on the living wage, working poverty and employer responsibility, which has now been published. This Insight Paper sets out a biblical understanding of working poverty, including the core issues and principles at stake, and also how we should respond to it.

The biblical vision for how we treat people and how we employ them calls for justice, dignity and responsibility. It is a clear and bold vision, which does not accept ‘working poverty’ as just another cost of business. We are called to a higher standard. Everyone with a stake in a business has a responsibility to ensure that the workers in that business are treated properly – whether we are an owner or investor, manager or employee, or a customer. It is also clear that the statutory ‘floor’ for employment in the UK leaves many in working poverty.

 We believe that in the UK today the time has come to say that poverty pay and working poverty are not acceptable practices in our marketplace. ‘No one who works for a living should live in poverty.’

How the Lab works

We will be working in three cities to explore these issues in practice. We are currently identifying local partners and will announce them soon.

With our partners, we will develop and establish a ‘Fair Pay Commitment’ which clearly defines the minimum pay, terms and conditions necessary in every business to address and eliminate working poverty. We will define what responsible private sector employers need to do to address this issue – setting a new ‘floor’ to match or exceed, including the real Living Wage, fair sick pay, predictable hours and other practical features.

In each city, we will work with churches, business employers and workers, to understand their situations and to develop a new approach. We will share updates as we go along and publish a full report at the end.

It is important to acknowledge that poverty is multi-faceted and there are many contributory factors, so the solution to poverty will have many parts. By focusing on one type of poverty we are not saying that others do not exist or do not matter, but that is not our focus in this Lab. Here, we are addressing issues in paid employment in the private sector, and the role that employers could and should play in addressing in-work poverty. We look forward to making a biblically-inspired and practical contribution.

Get involved

If you want to keep up to date with this Lab, and others as they launch, sign up for our free monthly news bulletin. We’re not just doing research, we’re building a national movement for change - join us!

You can also help to address working poverty by donating to the Jubilee Centre so that we can grow our team and engage more people, more businesses and more churches. Every donation builds our capacity to act.