Working Lives - experiences of in-work poverty in London

What you need to know

  • In the past decade, in-work poverty has been a growing problem – especially in London, where in-work poverty is a structural challenge mainly due to the nature of many of the jobs available, the wages paid to those working in them and the high cost of living.
  • In-depth interviews with those in work and living below the poverty line reported some common problems and drivers. These included low earnings, insufficient hours, high and rising living costs, and caring responsibilities. The interviews focused primarily to the pivotal position of employers in worsening/alleviating poverty.
  • All participants said that businesses could be more understanding, caring, and proactive, particularly towards employees that earn less and are in greater need of support. Participants cited the need for better provisions for sick pay, flexibility, in-work progression and upskilling, sufficient hours and subsidies to cover the high cost of living in the capital.
  • The key takeaway from this report is that employees want – and need – their employers to do more to help tackle London’s in-work poverty problem.

In the debate over in-work poverty, the human costs of living on low incomes often get lost. The Social Market Foundation, with support from Trust for London, has produced this report, drawing on 16 semi-structured in-depth interviews with people working in London and living below the poverty line. The interviews were conducted between October 2021 and January 2022.

Key findings

The key takeaway from this report is that employees want – and need – their employers to do more to help tackle London’s in-work poverty problem. As described by interviewees, the report shows how poor-quality work and unsatisfactory working conditions severely impact living standards and wellbeing across the capital. Crucially, it also highlights the ways employees think businesses can help.

In terms of what businesses can do to better support their employees, interviewees reported the following:

  • Better pay and hours
  • Increased autonomy and flexibility
  • More training, development, and progression
  • Better subsidies and benefits
  • Use of benchmarks

This supports previous research which shows that in-work poverty is, at least in-part, the consequences of factors like low pay, precarious hours, and other workplace issues – drivers that employers have direct influence over. As the Joseph Rowntree Foundation has pointed out, employers also have a bearing on the prevalence of in- work poverty among the workforce through contract through contractual forms and work organisation. The Chartered Institute of Personal Development has cited the importance of employee voice in securing job quality. These elements are the things workers say they need if working conditions, and all it entails, are to improve.

Next steps

The SMF is working with Trust for London to establish a business standard that encourages London employers to do more help their staff and tackle working poverty.

A two-year consultation process seeking ideas, observations, and feedback on the design of a new benchmark is already underway, and an expert advisory group consisting of representatives from business, relevant civil society groups, academics, practitioners and others is guiding the project through its next step.

27 July 2022