Issue date
07 May 2018

The number of children growing up in poverty in working households is set to be 1 million (+50%) higher this year than in 2010, according to new TUC research published today (Monday).

The analysis – carried out for the TUC by Landman Economics – estimates that 3.1 million children with working parents will be below the official breadline in 2018, compared to 2.1 million at the start of the decade.

Kids with at least one working parent will account for two-thirds of children living in poverty in 2018.

Public sector pay restrictions and in-work benefit cuts

The analysis shows that 600,000 children (with working parents) have been pushed into poverty as a result of the government’s in-work benefit cuts and public sector pay restrictions.

The TUC says that other key factors behind the 1 million rise in child poverty are:

  • Weak wage growth
  • The spread of insecure work
  • Population growth
  • The increase in working families

Household incomes

The research shows the impact of public sector pay restrictions and in-work benefit cuts on household incomes.

The analysis reveals that:

  • Families where both parents work in the public sector are the biggest losers from the government’s pay restrictions and benefit changes. Their average household income has fallen by £83 a week in real terms.
  • Households where one parent works in the public sector and another works in the private sector have lost, on average, £53 a week.
  • Households with private sector workers only have seen their incomes fall by £32 a week on average.

The East Midlands has been the worst hit region

The East Midlands is set to have the biggest increase in child poverty among working families (+76%), followed by the West Midlands (+66%) and Northern Ireland (+60%).

Thousands to march in London

The figures are published as tens of thousands of workers prepare to march in London this Saturday as part of the TUC’s ‘A New Deal for Working People’ demonstration.

The Labour Leader Jeremy Corbyn will address a rally in Hyde Park, that will also feature speeches by TUC General Secretary Frances O’Grady and frontline workers.

TUC General Secretary Frances O’Grady said:

“Child poverty in working households has shot up since 2010.

“Years of falling incomes and benefit cuts have had a terrible human cost. Millions of parents are struggling to feed and clothe their kids.

“The government is in denial about how many working families just can’t make ends meet. That's why tens of thousands will be marching in London this Saturday to demand a new deal for working people.

“We need ministers to boost the minimum wage now, and use the social security system to make sure no child grows up in a family struggling to get by.”

Editors note

Estimated increase in number of children living in poverty with a working parent since 2010 (nation/region)

Region

Number of children in poverty 2010

Number of children in poverty 2018

Extra children in poverty 2018 (000s)

Extra children in poverty 2018 (%)

North East

70,500

112,000

41,000

58%

North West

240,000

341,000

102,000

42%

Yorkshire

209,000

272,000

63,000

30%

East Midlands

126,000

222,000

96,000

76%

West Midlands

189,000

312,000

124,000

66%

East of England

180,000

262,000

82,000

45%

London

353,000

538,500

185,000

52%

South East

252,000

372,000

120,000

48%

South West

166,00

246,000

80,000

48%

England

1,784,000

2,677,000

893,000

50%

Scotland

122,000

185,000

63,000

52%

Wales

112,000

152,000

39,000

35%

Northern Ireland

56,000

89,000

33,000

60%

UK

2,100,000

3,100,000

1,000,000

50%

Source: Landman Economics Analysis and modelling for the TUC

Direct impact of government policy (public sector pay and benefit cuts on working households)

Household type

Projected number of children in poverty in 2018 –  if 2010 system had remained

Number of children in poverty 2018 – as a result of government reform

Public sector workers only

218,000

321,000

Public and private sector workers

181,000

236,000

Private sector workers only

2,111,000

2,545,000

TOTAL

2,500,000

3,100,000

Source: Landman Economics Analysis and modelling for the TUC

Weekly cash loss from in-work benefit cuts and pay restrictions

Household type

Weekly loss (£)

Public sector workers only

-£83.00

Public and private sector workers

-£53.00

Private sector workers only

-£32.00

Source: Landman Economics Analysis and modelling for the TUC

The public sector pay analysis is modelled on real wages falling by 13.3% between 2010 and 2018 for workers in health and education. And by 14.3% for workers in public administration.

– The data provided by Landman Economics are projections of child poverty in the 2018/19 tax year.  Landman Economics has estimated the impact of three further years of benefit and tax credit cuts, and the continuing roll-out of Universal Credit.

– The analysis includes all tax and social security measures introduced under the 2010-15 coalition government and subsequent conservative governments, including Universal Credit.

- The analysis uses the 2015/16 Household Below Average Income figures as its baseline. All figures are based on household income after housing costs.

- The 600,000 figure is based on the number of children who would be in poverty had the 2010 system remained.

 – A household is considered to be in relative poverty if its income is less than 60% of median income after housing costs.