A couple with two children working full time on the minimum wage are still £138 short per week of a basic standard of living, research has revealed. The Child Poverty Action Group (CPAG) has released its annual report on the ‘Cost of a Child’ that shows, for the first time since research started in 2008, all families on low or modest incomes are unable to meet their costs or achieve a basic standard of living.
Triple crisis: low wages, high inflation, high wealth inequality
This reflects the fact that we have lower real wages in the UK since the financial crash, with workers facing the longest pay squeeze in 200 years, according to the TUC. And as CPAG notes:
from 2021 to 2024, headline inflation was much higher, and there were particular pressures on low-income families as areas where they spend a greater share of their income (food, energy), saw sharp price rises higher than overall inflation
Indeed, a report from the Education Policy Institute (EPI) recently highlighted that food prices were generally up 19% from March 2022 until March 2023. And some key foods such as pasta and vegetable oil rose by at least 60%.
Using research from the Centre for Research in Social Policy at Loughborough University, CPAG calculated that a two parent family with two children working full time on the minimum wage are still around one fifth below meeting a basic standard of living.
This stands in contrast to 2008 where the equivalent family could cover 93% of costs. At the same time, the wealth of just the top ten billionaires in the UK has increased from £47.77bn in 2009 to £182bn in 2022 – an increase of 281%.
Labour isn’t helping
CPAG’s findings come at a time where prime minister Keir Starmer has relaunched his premiership with a focus on living standards. He claimed he will achieve:
Living standards raised, people better off, more cash in their pocket
But so far he has failed to announce any significant policies that address the rampant inequality between parents working full time – who can’t even make ends meet – and the super rich.
And that’s before you get to single parents and those out of work. People may be unable to work or – another factor – is that there are far less vacancies in the country than there are unemployed people. And that’s without accounting for whether people have the skills for the job.
A lone parent working full time on the minimum wage can only meet 69% of costs, while a lone parent on the median wage can meet 80% of costs. Meanwhile, a couple not working can only meet 39% of costs and, for a lone parent out of work, it’s 44%.
It’s not wonder the poverty rate is so high in the UK. As the Canary previously reported:
Despite numerous promises from successive governments, the poverty rate in 2022/23 has climbed to 24% – the highest recorded this century. This equates to 16 million people, including 5.2 million children, living in poverty.
In its ‘Cost of a Child’ report, CPAG also points out that Labour’s decision to keep the two child benefit cap has exacerbated the cost of living crisis further for those with three or more children. A couple with three children working full time on the minimum wage can only meet 70% of their costs. And a lone parent with three children on that full time salary can only meet 61%.
CPAG: “urgent policy reform” needed
Chief executive of Child poverty Action Group Alison Garnham said:
The PM can see that families are struggling against the tide but a reset will need action not just words. Investment in children through the social security system is guaranteed to improve living standards for kids and would be a vital down-payment on the future of the country. Families need to feel improvements, and a crucial place to start is with scrapping the two-child limit.
Dr. Juliet Stone of Loughborough University, who did the calculations for the report, said:
Our updated analysis of the cost of bringing up a child shows that parents living on low incomes are increasingly unable to provide their families with a decent standard of living, even if they are in full-time work. The findings add further evidence of the need for urgent policy reform – including removing the two-child limit – to ensure that all children can grow up in households with enough income to allow them to live with dignity.
The report also found that the cost of raising a child from birth to 18 is £260,000 for couples and £290,000 for lone parents. Given children are the future, we should ensure parents have enough to raise them through addressing inequality, along with price controls or public ownership of essentials.
Featured image via Channel 4 News – YouTube
