No Pathway to Work - 40% increase in Working Poor

Posted on Wednesday, 15 March 2023

Having a job is not, of itself, a guarantee that one lives in a poverty-free household. The latest data from the CSO Survey on Income and Living Conditions indicates that 5.8 per cent of people in employment were living in poverty in 2022. Over time poverty figures for the working poor have remained more-or-less static, reflecting a persistent problem with low earnings. However, in 2022 this number increased by 40 per cent to 133,565 compared to the previous year. This is a remarkable statistic, and it is important that policy better recognises and addresses this problem.

Many working families on low earnings struggle to achieve a basic standard of living. Policies which protect the value of the minimum wage and attempt to keep those on that wage out of the income tax net are relevant policy initiatives in this area. Similarly, attempts to highlight the concept of a ‘living wage’ and to increase awareness among low income working families of their entitlement to the Working Family Payment (formerly known as Family Income Supplement (FIS)) are also welcome; although evidence suggests that FIS had a very low take-up and as such this approach has questionable long-term potential. However, one of the most effective mechanisms available within the present system to address the problem of the working poor would be to make tax credits refundable.

A report from Collins (2017) provided new insights into the scale and composition of low pay in Ireland. It established that 25 per cent of employees (almost 345,000) earned less than the (then) Living Wage of €11.45 per hour. The paper found that low pay was most common among: female workers; young workers; those in retail, hotels and security sectors; single parents; and those on temporary contracts. Looking at the household level, the paper also found that a higher proportion of low paid employees are living in households that struggle financially, borrow for day to day living costs, and experience deprivation.

People in Employment

Meeting the needs of people in employment who will by necessity have to re skill and upskill during their careers as they face the challenges of moving to a low carbon future (and the implications this has for employment), and the skills and employment changes that new technology will bring.

A report from SOLAS on Older Workers concludes that measures must be taken to protect older workers from the threat of technological changes in the workplace (SOLAS, 2019). The report is focussed on workers aged 50-59 and among the key findings are:

Since 2008 there has been an increase of 330,000 people aged 50 years or over resident in Ireland;
There were 425,800 people aged 50-59 in employment in Q4 2018;
Over 176,000 people aged 50-59 in employment had attained an educational qualification of upper secondary or less;
The labour force participation rate for people aged 50-59 is just over 75%;
Since 2008 the female participation rate for the 50-59 age group increased significantly from 59% to 66%;
Technological change will have the greatest impact on people employed in elementary, administrative, sales and operative roles;
Approximately one third (146,300) of workers aged 50-59 employed in these occupations.

The SOLAS report found that engagement with lifelong learning declines with age, and that those with lower educational qualifications are less likely to take part in lifelong learning. Conversely this is the very group that lifelong learning policy should be targeting. In fact, those engaged in lifelong learning are more likely to be professionals than low-skilled operatives and employed in public administration, professional services and finance, sectors that are more likely to provide in-house training, continuous professional development and have policies for subsidising education, than the retail or construction sectors. Employers must be encouraged and incentivised to participate in the development of any lifelong learning strategies. This not only supports the development of the employee but contributes to the retention rate and effectiveness of the business, which in turn reduces the costs associated with hiring and developing new staff.

An essential component of this should be reskilling, upskilling and access to lifelong learning. Policy must be flexible enough to meet needs on a regional basis, considering the potential future skills needs and employment opportunities that will become available in a particular region. The Public Employment Service will be one of the key pillars of delivery of education, income support and training as part of a Just Transition to a low carbon future, and to this end must be adequately resourced and properly informed as to the needs and opportunities that will emerge as Ireland implements policies to reduce our emissions and moves to a more sustainable form of development.

Under-employment and Precarious Employment

There has been a growth of various forms of part-time work and a high number of underemployed workers over recent years. While the number of people employed is higher now than at any time, just over one in five workers are part-time workers and there are 102,400 of these who are underemployed, that is working part-time but at less hours than they are willing to work.

Judged over time, the CSO labour force data suggest the emergence of a greater number of workers in precarious employment situations. The growth in the number of individuals with less work hours than ideal, as well as those with persistent uncertainties concerning the number and times of hours required for work, is a major labour market challenge and one which may grow in the period ahead. Aside from the impact this has on the well-being of individuals and their families, it also impacts on their financial situation and adds to the working-poor challenges we outlined above. There are also impacts on the State, given that the Working Family Payment (formerly known as Family Income Supplement (FIS)) and the structure of jobseeker payments tend to lead to Government subsidising these families’ incomes, and indirectly subsidising some employers who create persistent precarious employment patterns for their workers.

Social Justice Ireland believes that now is the time to adopt substantial measures to address and eliminate these problems. Our commitment to the development and adoption of a Living Wage reflects this. Also in that context, the establishment of the Low Pay Commission was a welcome development. It is important that this group provides credible solutions to these labour market challenges and that such proposals are implemented.

Recognising All Work

A major question raised by the current labour-market situation concerns assumptions underpinning culture and policymaking in this area. The priority given to paid employment over other forms of work is one such assumption. Most people recognise that a person can be working very hard outside a conventionally accepted “job”. Much of the work carried out in the community and in the voluntary sector comes under this heading. So too does much of the work done in the home. Social Justice Ireland’s support for the introduction of a basic income system comes, in part, because it believes that all work should be recognised and supported.

During the recession Government funding for the Community and Voluntary sector reduced dramatically and this has not, yet, been restored. It is essential that Government appropriately resource this sector into the future and that it remains committed to the principle of providing multi-annual statutory funding. The introduction of the Charities Regulatory Authority, the Governance Code and the Lobbying Register in recent years is intended to foster transparency and improve public trust. However, it is essential that the regulatory requirements are proportional to the size and scope of organisations, and do not create an unmanageable administrative burden which detracts from the core work and deters volunteers from getting involved.

In August 2019, the Department of Rural and Community Development published Sustainable, Inclusive and Empowered Communities: A Five-Year Strategy to Support the Community and Voluntary Sector in Ireland 2019-2024 (Department of Rural and Community Development, 2019). This Strategy sets out the vision for community and voluntary sector development over the next five years. It contains a series of 11 policy objectives across all stakeholders, from Public Participation Networks to civil society organisations to local and national Governments.

The Community Services Programme works to tackle disadvantage by providing supports to community-based organisations that enables them to deliver social, economic and environmental services, with a particular focus on an area that, by virtue for geographical isolation or social isolation or have too low a level of demand to satisfy market led providers. The groups in receipt of these services may not otherwise have any access.

Social Justice Ireland recommends that implementation of the five-year Strategy be resourced in a way that recognises the important role of the Community and Voluntary Sector, the local role of the PPNs, and the challenges of community development, and seeks to generate real partnerships between communities and agencies. We further urge Government to publish the Volunteering Strategy which was being developed in tandem with the Strategy and the Social Inclusion Strategy so as to ensure policy coherence across all three strategies.

The need to recognise voluntary work has been acknowledged in the Government White Paper, Supporting Voluntary Activity (Department of Social, Community and Family Affairs, 2000). The report was prepared to mark the UN International Year of the Volunteer 2001 by Government and representatives of numerous voluntary organisations in Ireland. The report made a series of recommendations to assist in the future development and recognition of voluntary activity throughout Ireland. A 2005 report presented to the Joint Oireachtas Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs also provided an insight into this issue. It established that the cost to the state of replacing the 475,000 volunteers working for charitable organisations would be at least €205 million and could be as high as €485 million per year.

Social Justice Ireland believes that government should recognise, in a more formal way, all forms of work. We believe that everyone has a right to work, to contribute to his or her own development and that of the community and wider society. We also believe that policymaking in this area should not be exclusively focused on job creation. Policy should recognise that work and a job are not always the same thing.

Acknowledging the Work of Carers

The work of Ireland’s carers receives minimal recognition despite the essential role their work plays in society. Results from the 2016 Census offered an insight into the scale of these commitments, which save the state large costs that it would otherwise have to bear.

Census 2016 found that 4.1 per cent of the population provided some care for sick or disabled family members or friends on an unpaid basis. This figure equates to 195,263 people. The dominant caring role played by women was highlighted by the fact that 118,151 (60.5 per cent) of these care providers were female. When assessed by length of time, the census found that a total of 6,608,515 hours of care were provided by carers each week, representing an average of 38.3 hours of unpaid help and assistance each. Two thirds of this volume of care was provided by female carers. Using the minimum wage as a simple (if unrealistically low) benchmark to establish the benefit which carers provide each year suggests that Ireland’s carers provide care valued at more than €3.4bn per annum[1].

Social Justice Ireland welcomed the long overdue publication of a National Carers Strategy in 2012 (Department of Health, 2012). The document included a ‘roadmap for implementation’ involving a suite of actions and associated timelines and identifies the Government Department responsible for their implementation. However, these actions were confined to those that could be achieved on a cost neutral basis. Various progress reports of the strategy have been published to date and point towards some progress on the actions set out. However, these are, as a group, limited given the unwillingness of Government to allocate sufficient resources to supporting those in this sector.

Social Justice Ireland believes that further policy reforms should be introduced to reduce the financial and emotional pressures on carers. These should focus on addressing the poverty experienced by many carers and their families alongside increasing the provision of respite care for carers and for those for whom they care. In this context, the 24-hour responsibilities of carers contrast with the improvements over recent years in employment legislation setting limits on working-hours of people in paid employment.

Facing the Challenges Ahead

Social Justice Ireland believes that if the challenges and needed reforms are to be effectively addressed, Government’s key policy priorities in this area should be to:

Resource the up-skilling of those who are unemployed and at risk of becoming unemployed through integrating training and labour market programmes.
Launch a major investment programme focused on prioritising initiatives that strengthen social infrastructure, including a comprehensive school building programme and a much larger social housing programme.
Adopt policies to address the worrying issue of youth unemployment. In particular, these should include education and literacy initiatives as well as retraining schemes.
Recognise the challenges of long-term unemployment and of precarious employment and adopt targeted policies to address these.
Recognise that the term “work” is not synonymous with the concept of “paid employment”. Everybody has a right to work, i.e. to contribute to his or her own development and that of the community and the wider society. This, however, should not be confined to job creation. Work and a job are not the same thing.

Social Justice Ireland believes that in the period ahead Government and policymakers generally should:

Expand funded programmes supporting the community to meet the growing pressures throughout our society.
Establish a new programme targeting those who are very long-term unemployed (i.e. 5+ years).
Ensure that at all times policy seeks to ensure that new jobs have reasonable pay rates, and adequate resource are provided for the labour inspectorate.
Adopt policies to address the working poor issue including a reform the taxation system to make the two main income tax credits refundable.
Develop employment-friendly income tax policies which ensure that no unemployment traps exist. Policies should also ease the transition from unemployment to employment.
Adopt policies to address the obstacles facing women when they return to the labour force. These should focus on care initiatives, employment flexibility and the provision of information and training.
Reduce the impediments faced by people with a disability in achieving employment. In particular, address the current situation in which many face losing their benefits, including the medical card, when they take up employment.
Facilitate the right to work of all asylum seekers and resource the improvement of the current system of processing asylum applications.
Give greater recognition to the work carried out by carers in Ireland and introduce policy reforms to reduce the financial and emotional pressures on carers. In particular, these should focus on addressing the poverty experienced by many carers and their families, as well as on increasing the provision of respite opportunities to carers and to those for whom they care.
Request the CSO to conduct an annual survey to discover the value of all unpaid work in the country (including community and voluntary work and work in the home). Publish the results of this survey as soon as they become available.
Recognise that the term “work” is not synonymous with the concept of “paid employment”. Everybody has a right to work, i.e. to contribute to his or her own development and that of the community and the wider society. This, however, should not be confined to job creation. Work and a job are not the same thing.

[1] A CSO QNHS special module on carers (CSO, 2010) and a 2008 ESRI study entitled ‘Gender Inequalities in Time Use’ found similar trends (McGinnity and Russell, 2008:36, 70).