There is a common assumption that deprivation is a condition associated with unemployment. But if you get a job, you can work your way out of poverty and deprivation. That is the theory, anyway. However, there are huge swathes of households where income from work is not enough. We have high, and growing, levels of deprivation among in-work households. Welcome to the new way of working – take-home pay with take-home deprivation.
The CSO sets out a menu of deprivation indicators in the EU Survey of Income and Living Conditions. If an individual suffers two or more of these conditions, they are included in the deprivation rate.
Without heating at some stage in the last year • Unable to afford a morning, afternoon or evening out in the last fortnight • Unable to afford two pairs of strong shoes • Unable to afford a roast once a week • Unable to afford a meal with meat, chicken or fish every second day • Unable to afford new (not second-hand) clothes • Unable to afford a warm waterproof coat • Unable to afford to keep the home adequately warm • Unable to afford to replace any worn out furniture • Unable to afford to have family or friends for a drink or meal once a month • Unable to afford to buy presents for family or friends at least once a year
Deprivation throughout Ireland is on the rise. In 2008, the first year of the recession, 13.8 percent of all individuals were officially categorised as deprived. In the last year we have data for, 2011, deprivation increased to 24.5 percent. Over 1.1 million Irish people now suffer multiple deprivation experiences. This is grim.
The loss of employment, combined with cuts in social protection income, has been a major contributor to the growth in deprivation. However, another major contributor – and one which is rarely referred to – is the rising levels of deprivation among those in work.
In 2008, 10 percent of those in work suffered multiple deprivation experiences. With three years this rate doubled – with nearly one-in-five of those in work officially categorised as deprived. This is equally grim.
Unsurprising, the deprivation rates vary depending on the number of people at work in the household.
In households where there is one person working – either full or part-time – the deprivation rate is 27.5 percent. More than one in four people in one-income households suffer multiple deprivations. This percentage is higher than the national average (24.5 percent). However, even among households with two or more incomes, deprivation affects more than one-in-ten.
There are a number of factors contributing to rising levels of deprivation. Previously two-income households may fall into deprivation if a partner loses their job. Someone previously unemployed may have found part-time work – but still suffer from deprivation. These are not static categories.
Clearly, falling incomes are a contributor – either through wage cuts or reduced working hours. Between 2008 and 2011, the average gross income fell by 2.4 percent. But people have taken another financial hit through increased taxation. On the average income, a single earner in a two-adult household suffer a fall of 7.8 percent in take-home pay, owing to increased taxation– and this this doesn’t count increased service charges, VAT and excise, and the property tax.
Another factor is rising costs – especially for households with children. As children grow older, costs increase with many households having a first or additional child during this period. And with Child Benefit being slashed during this period by €312 annually per child, many households are running and still not able to standstill.
And, of course, there is the issue of debt and trying to get out from under it.
There are a number of issues involved in rising deprivation but, at root, it is that we are working less and taking home less while trying to deal with rising costs and heavy debt loads. The resulting bottom-line is rising deprivation in work.
One could hope that the Government will take this issue on board but I’m a tad pessimistic. Further austerity measures are being planned (whether its €3.1 or €2.8 billion represents only a small difference). We should expect higher taxation; the property tax will double automatically with further excise tax increases to be expected. There is some employment generation in the economy but nothing on the scale that the Government is claiming, with many of these jobs being precarious (under-employment, zero-hour contracts, etc.). And the debt situation is not going away anytime soon.
If we want to ‘make work pay’ we need new labour market and fiscal policies, we need decent wages and decent working conditions. We need greater focus on one of the most troubling aspects of the recession – that one-in-five people at work suffer multiple deprivations.
That statistic alone should inject some urgency into policy.