One in five are not paid enough to live on
The people are living on what they are being paid so obviously it is not true.
The calculation is rather different. The Joseph Rowntree lot conduct a survey each year. They ask a panel what is it that people should be able to do on their incomes without being regarded as poor. The answer includes things like going out for a couple of pints once a week, a simple meal out once a month and so on.
This is very much the Adam Smith approach to poverty. A linen shirt is not a necessity but if you live in a society that says that if you cannot afford a linen shirt you are poor, you cannot afford a linen shirt, then in that society you are to be regarded as poor.
It is actually the right way to calculate poverty. For poverty is an opinion roughly calculated by society. Thus you need to observe what society calculates poverty to be.
But note, no one at all is saying that this isn\’t enough to live on. It\’s not enough to live on and not be in poverty.
Having said that we can move on to the solution. The difference between the Living Wage (which is what allows you to live not in poverty) and the minimum wage is the tax and national insurance charged on low wages.
Note, and nota bene, that the Living Wage is a pre-tax number. This is before the income tax and NI that is charged to these wages. If you take those off (and I\’ve not done it for this year\’s number but I have for previous years) you find that the living wage of £7.20 (or whatever) an hour is within pennies of the minimum wage of £6.19 (or whatever) an hour.
Which leads us to an interesting conclusion. Let us accept, arguendo, that the Rowntree folks have got it right. That poverty is something determined by what society thinks poverty is. Further, that their calculation of the money required to not be in poverty is correct. What then is our problem?
It is not that wages are too low. The minimum wage is almost exactly what they say that poverty level is. It is that taxes on the poor are too high. Which is an easy problem to solve, something well within the government\’s power. Stop taxing the poor so much.
Which, when you come to think of it, is pretty obvious really. If you want to increase the incomes of the working poor then just stop taxing them so bloody much.