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How can parents escape from recurrent poverty?

The low-pay no-pay cycle and disadvantaged mothers

Professor Ronald McQuaid, with Vanesa Fuertes and Alec Richard

Scottish Policy Innovation Forum at the Royal Society of Edinburgh 14 June 2010

Employment Research Institute

Edinburgh Napier University, Edinburgh www.napier.ac.uk/eri

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Policy Context

Series of government policies dealing with

poverty and child poverty in particular

Government aim of ending child poverty by 2020; Scottish Parliament report

Mainly by getting more parents into employment – accept poverty & well-being more than just employment

Child poverty statistics Proportion of children in poverty higher for workless

households Many children in poverty live in households where one

or two parents work

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Research Context

Few qualitative studies on low-income parents

Poverty as a dynamic process – poverty as: Persistent Recurrent Transient

Lack of research on recurrent poverty This study was funded by the Joseph Rowntree

Foundation as part of their Recurrent Poverty Programme One of the five in the Recurrent Poverty Programme

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Aims of the research

Reasons for recurrent poverty among

disadvantaged parents and ways to escape it. Special focus on childbearing and childrearing

Cycles of poverty caused by cycles of

worklessness. Movements into and out of paid employment Barriers and enablers behind those movements

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Methods

Quantitative analysis of Working for Families Fund

(WFF) data (12,248 parents, from 25,508 on WFF) Informed the qualitative data collection

Interviews with Parents (33) 31 WFF clients; 32 women; 14 areas in Scotland

Focus groups with professionals (WFF key workers) 3 focus groups with 27 professionals

Interviews with three professionals in managerial

positions Contrast and complement & solutions to problems

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Quantitative Findings

Over one third of mothers had entered employment

by the end of WFF

Characteristics associated with less likelihood of

entering paid employment: No qualifications Long term unemployment Having more children Having children aged 3 to 4 or children aged 12 or over Being under 19 or over 45 Children with disability / chronic health problem / RoN Reported as disabled

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Qualitative Findings

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Data collection Questionnaire

Nature of the data collected Participants’ recollection of past events Specific income details only recorded at time of

interview

Analysis of the data – dynamic patterns of

people’s lives Time-line data displays

Example

Interviews with Parents

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Going into poverty or worse poverty

Inter-related and cumulative factors: External factors including the labour market situation Household circumstances Individuals’ experiences & characteristics

Specific life event/s or ‘critical’ moments where a

household moves into poverty or worse poverty: The birth of a child The breakdown of the relationship Domestic violence, health, etc.

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Trying to escape poverty

The majority of our participants felt poor

The majority had held one or more jobs since falling into poverty A few participants suffered persistent non-working poverty (3)

The majority of parents wanted to work to: Improve household finances; Improve their emotional well-being; Be a role model.

Most parents were looking for part-time work Childcare and work-life balance considerations

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Paid employment – route out of poverty?

What effect did securing a job actually have?

Source: Joseph Rowntree Foundation (Cycles of poverty, unemployment and low pay)

Figure 1: Relationship between cycles of income and worklessness

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The low-pay no-pay cyclereasons and barriers

Low paid jobs – cost of working

Low qualifications and obstacles to education

The cost and lack of childcare

Types and conditions of jobs available

Debt

Low confidence

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The low-pay no-pay cyclereasons and barriers

The operation & levels of benefits and tax credits: The four-week gap

• Between benefits’ stoppage when starting work and first pay cheque

Working Tax Credit (WTC) • Top-up payment based on previous year’s income (practitioners)

• The lack of an estimate of entitlement

Childcare element of the WTC• Four-week gap – inability to cover upfront fees/deposit

• Payment averaged over the year while demand fluctuates

Others: transport; health issues; ‘target or box ticking

culture’

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Breaking the cycle

A few participants (4) have escaped the cycle for

a length of time, the majority by obtaining: Full-time jobs that paid above the minimum wage Jobs that solved or limited childcare barriers Effective support to overcome obstacle

Same number had recently escaped but are at

risk due to: Childcare arrangements Debt repayment Struggling with paid employment

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Conclusions

Make work pay

Increase access to affordable childcare

Encourage employers’ flexibility To reconcile work and family life

Reduce unintended consequences resulting from

the benefits and tax credit systems Make them more sensitive and responsive to people on

low-incomes to aid movements into and increase sustainability of employment

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Conclusions

Deal with debt issues by: Reducing debt incidence Adequate support and repayment schemes to minimise

its adverse effects

Reduce barriers to education To aid movements into better jobs

Have in place adequate support Holistic support targeted at a range of individuals’

needs Non-employment aspects of well-being, and

capabilities, are also crucial

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Thank you for listening

Copies of the JRF report are available at: www.jrf.org.uk/publications/how-parents-escape-recurrent-

poverty www.napier.ac.uk/randkt/rktcentres/eri/projects/Pages/ParentsE

csapeRecurrentPoverty.aspx

Copies of the Working for Families reports are available at: www.scotland.gov.uk/Publications/2009/04/20092521/0

www.napier.ac.uk/randkt/rktcentres/eri/projects/Pages/WorkingforFamilies.aspx

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Reasons out

Health

Support received

Finances

Reasons in

Accepted for training at hospital but moved away with husband job

Didn’t settle - moved back to home region

Overcame a developing problem

Feeling

Practical & emotional support from X organisation– confidence building / job seeking, offering courses, etc.

Husband retired on grounds of ill health – became breadwinner

Financially, emotionally & confidence building; felt ready to work; youngest ok working in school hrs; support

Friends very helpful emotionally; Parents emotionally + financially

Threatened miscarriage

Stopped work when husband died – grieving process

Had trust issues re. family problem

Preferred to work full-time but it did not pay off due to tax issues <> ?

Devastated by husband’s death – rejected help from those close to her

Rejected or unable to accept outside help: offered counselling, went once but not ready for it

Grief reaction; mood swings; rejection of other’s help;

Going from a 2 to none Income was horrendous <>; Parents provide financial helpWidow’s benefit + husband’s pension – not other benefit at all: very hard on this <>

Friends support; needed to get out of grieving process

HouseholdMoved region with husband

Husband ill Husband died

Family problem

EMPLOYMENT

UNEMPLOYMENT

EDUCATION

2000

x Workx work x Work

x Work

200x

200x

x Work

200x 2nd Child

200x3rd Child +Husband illness

200x Husband died

Moved away

Moved back to home region

Married200x

200x

200x

Reasons in

Supportreceived

Feeling

Back

200x

200x

IT course

200x 1st Child

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Financial hardship – Falling into poverty

“You’ve always got to count up. When I am

putting things in my basket I am always counting

everything in my head so to have enough and it is

horrible having to do that.” (Janet, lone parent with 1 child, unemployed)

Back

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Employment – emotional well being

“I think I was happier when I was working

because I was getting out and meeting new folk

and seeing different faces every day.

And when I am not working I am just stuck doing

the same thing day out day in.” (Amy, lone parent with 2 children, unemployed)

Back

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Employment - role model

“ … I think it’s really important that both my children

learn what is the right way to do things, that you work.

My children think that everybody goes to college when

they leave school because they’ve seen me studying on

constantly.

I want them to have those values that you work for a

living and you earn money and you reach your potential,

so I think it’s important as a role model to them for them

to see that.” (Rachel – lone parent with 2 children, unemployed)

Back

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Barriers – low paid jobs

“I felt really stressed out because … that is where

my wages were going, on my rent and my council

tax and then I didn’t have anything left even for

travel [to work and back].

So I was better off out of work than when I was

working.” (Emily, lone parent with 2 children, unemployed)

Back

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Barriers - childcare

“It is not being able to say to the employer when

I can start, what hours I can do, until you have

childcare in place … but you can’t get childcare

until you are working.” (Jane, lone parent with 4 children, unemployed)

Back

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Barriers - education

“Ever since I started college everything has been

up and down, like a rollercoaster money-wise.

I was better off when I wasn’t at college because

everything stayed the same.”(Mary, lone parent with 3 children, education part-time)

Back

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Barriers - debt

“Everything just hits you when you start working.

They come chasing you, that is the most horrible

thing about it, because it puts you off, just makes

you want to go back on Benefits and just pay £2 a

week.

I am going to be honest that is how it feels like,

but I am trying to deal with it.”

(Lucy, lone parent with 2 children, working full-time)

Back

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“Because I’d been out of work for such a long time …. when you are at home with young children, especially on your own, you really quickly lose confidence, you’re not getting any intellectual stimulation.

You’re feeling quite insecure about being a new parent and not really convinced that you’re doing it right all the time, it’s completely normal.

It doesn’t matter how much of a high flyer you were before, if you find yourself outside that loop, it really quickly goes away.”

(Rachel, lone parent with 2 children, unemployed)

Barriers - confidence

Back