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The Feminisation of Poverty in the UK

 

The feminisation of poverty is a global phenomenon whereby a greater proportion of women live in poverty than do men. Around 14 million people in the UK – 22 per cent of the population – are living in poverty (ONS, 2016). Within this group, 37 per cent are men, 40 per cent are women, and 23% are children (DWP, 2013). These official statistics, which document poverty according to household rather than individual income, conceal two things: Firstly, women are much more likely than men to be living in poverty within a household, surviving without the resources to meet their minimum needs (Bradshaw et al. 2003). Secondly, women are at a much greater risk of poverty than men, since they are more likely to face poverty after marital separation, if the woman progresses to living in a single female-headed household (Bennett and Daly, 2014). Although current policy may have no effect on current poverty rates therefore, this increased risk may substantially affect future poverty rates amongst women.

This report adopts The Joseph Rowntree Foundation’s definition of poverty: a state in which the resources available to an individual are below their minimum needs. The measurement that is used by official statistics is relative income poverty, which defines households with less than 60 per cent of the median income as living in poverty. This official measurement does not account for the multi-faceted nature of poverty, which it is a question not only of income but of wellbeing. Furthermore, it fails to account for individual experiences of poverty, whereby an individual may be living without sufficient resources within a resource-rich household.

In this report, I consider how government policy since 1997 has affected the proportion of women in (and at risk of) poverty, with the aim of understanding how current policies will affect the feminisation of poverty (August 2017). I focus on one group of women: those with children who are living in couple households. The policy focus of this report is on the tension between the government’s efforts to reduce poverty and its flagship economic policy (which involves continuing austerity measures).

In summary, the main features of these policies are:

  • Anti-poverty measures: The Improving Lives, Helping Workless Families (HWF) 2017 paper sets out the government’s current policy for combating poverty, which focuses solely on reducing child poverty through measures to help workless families into employment. These measures aim to combat the ‘root causes’ of worklessness, including parental conflict and drug and alcohol abuse.
  • Austerity measures: economic policy includes cuts to public services, public sector jobs and the public sector pay freeze, with the main focus of this report being on the changes to Universal Credit (UC). This is a new benefit scheme, currently being rolled-out across the UK, which combines six types of benefit (including Tax Credits and Child Benefit) into one universal benefit. The benefit is based upon household, rather than individual, income and is paid into one account in a lump-sum payment once per month. The stated aim of this scheme is to ‘make work pay’ through re-structuring the disincentives to work from benefit loss. However, changes to the Work Allowance (the amount that can be earned before benefit is reduced) since the initial design of the scheme have raised doubts as to whether it is able to achieve this goal.

In order to analyse the effects that these policies are likely to have, I adopt Bennett and Daly’s (2014) three-part framework, which accounts for the complex factors that cause women to enter and remain in poverty. This framework focuses on the three channels through which resources are distributed: the labour market, the welfare state, and the family.

Key findings

The labour market
One of the most effective routes out of poverty is through employment. Women currently face significant barriers to employment due to the limitations of care responsibilities and gender discrimination in both recruitment and the workplace. This results in many women having low-paid, part-time jobs. The gender pay gap widens substantially during the age range 25-55, after childbearing and during the family-rearing stage.

The government’s anti-poverty strategy and austerity measures do little to help the situation. Both policies are likely to be successful in increasing the number of men in employment: changes to UC will provide greater incentives for single-earner households and penalise two-earner households through benefit reductions. Women, more often the ‘second earners’, will face disincentives to work. Furthermore, HWF is likely to encourage only one parent in the family into work. Since barriers to employment are greater for women, it is likely that the father will enter employment, leaving mothers behind.

The cuts to the public sector (in terms of both jobs and the real value of earnings) harm women more than men, since around two-thirds of the public sector workforce is female (IFS, 2013). According to the Women’s Budget Group (2010), 73 per cent of those that are affected by the public sector pay freeze were women. The continuation of these cuts will decrease the incomes of many women or eliminate them altogether.

Increasing barriers to well-paid and fulfilling employment for women increases the chances of poverty within single female-headed households. Within couple households, the effect is more complex. This is because many women without jobs can escape poverty through dependence on their partner’s resources, based on the assumption that resources are distributed across the family. However, the extent and nature of intra-household sharing of resources is known to vary (Burton et al. 2007), thus the assumption that there is an equal distribution of resources is risky from a gender perspective (Bennett 2008). Some women may face individual poverty (rather than household poverty) if they do not have an independent source of income and are not given sufficient resources from their partner to meet their minimum needs. Furthermore, the relationship of dependency increases the risk that women will face poverty in the future if the couple separate, particularly since economic inactivity makes it even harder to find a job.

The welfare state
The welfare state prevents many from falling into poverty by providing public services and direct transfers of income. Women are more dependent than men upon the welfare state. As stated above, this is because care responsibilities prevent many from entering employment and earning an independent income. Even within employment, women may suffer in-work poverty because they are only able to maintain part-time, low-paid jobs whilst caring for dependents. The current policies affect women in four key areas: benefits paid through UC, childcare provision, public sector cuts and public service cuts. HWF does nothing to combat in-work poverty, despite a majority of children living in poverty (67 per cent) living in households where at least one person works (DWP, 2017).

Changes to the design of UC since its initial outline are likely to hit women the hardest, since a higher proportion of women’s income is made up from benefits (19 per cent) than men (8 per cent). Lone parents (of which 9 out of 10 are women) are expected to be on average £2,380 a year worse off, while families with two children lose 100 on average and those with three children lose £2,540 (CPAG, 2017). Other benefit changes such as the restriction of the Sure Start Maternity Grant, the two-child limit on child benefits and the ban on housing benefit for 18 to 21-year-olds are likely to damage women’s incomes more than men’s. Concerning housing benefit, single women make up around 50 per cent of the recipients compared with couples making up around 25 per cent and single males, 25 per cent.

Inadequate childcare facilities prevent women, especially single mothers, from entering the labour market. Childcare in the UK is the most expensive in Europe (OECD, 2016), and it is often infeasible for a woman to work full-time with care responsibilities. Care for disabled or elderly people is also too expensive for many to afford. Carers UK (2013) reports that 2.3 million people have given up work to care and almost three million have reduced their hours. The government is doing too little to change the situation of expensive care facilities, with its current pledge of 30 hours of free childcare for 3 and 4 years olds being inadequate.

Cuts to public services affect women more than men, since they are more likely to use public services in their roles as main carers for children and the elderly. The Women’s Budget Group (2014) reported that £22 billion of the £26 billion ‘savings’ made from cuts in social security and changes in direct taxation since June 2010, have come from women – 85 per cent of the total. Cutting public services results in individuals either paying for services themselves, or not using them altogether. Some of the services that the government provides, particularly within healthcare and education, are considered to be services which help many to meet their minimum needs. The loss of this resource may bring women (and their children) into poverty, either from the loss of money required to pay for the services, or – where unaffordable – from the loss of the service itself.

The majority of those living in poverty are within working households; it is increasingly the case that both parents have to work in order for the household to escape poverty. The disincentives for ‘second earners’ to work resulting from the changes to UC is likely to prevent an increase in two-earner households. This will have an impact upon household poverty, affecting men, women and children. Furthermore, cuts to the welfare state are likely to increase the number of individual women living in poverty by reducing their independent source of income. This is the case both for those who are out of work, due to the changes to the benefit system, and those within work, due to cuts to public sector jobs and changes to UC. The reduction in the quality and availability of public services is likely to impact on the ability of mothers to meet their own minimum needs and those of their children.

HWF is unlikely to be effective in counteracting child poverty due to its approach. It claims to focus on the root causes of poverty, tackling the link between problems such as alcohol dependency and parental conflict, and child poverty. However, the problems that it cites are known to be linked to poor financial situations. It may be that alcohol dependency and parental conflict are symptoms, rather than causes, of the root of the problem: a lack of money. If this is the case, austerity measures are likely to push more workless families into poverty through reducing the real value of their benefits. The ineffectiveness of the approach has been exposed by an evaluation by the National Institute of Economic and Social Research (NIESR) of the Troubled Families Programme, which is a key part of HWF (DCLG, 2016). It concludes that in its first four years, there was no clear evidence that the programme had any significant effects. The programme had ‘no discernible’ effect on unemployment, truancy or criminality.

The family
The effect of the family upon poverty is often overlooked, since poverty data are usually concerned with household poverty rather than the poverty of individuals within the household. However, the structure of the household and the (mal)distribution of resources within it can be seen as a further cause of poverty (Bradshaw et al. 2003). Dependence upon the income of a partner has two effects. Firstly, it may leave some women without sufficient resources to meet their minimum needs, since their partner may choose not to distribute their income to the family. Breadwinner ideology can affect who accesses resources within the household, with the primary earning controlling the use of financial resources (Bennett 2013). Secondly, it is likely to increase the risk of future poverty, since economic dependence means that an individual’s continued economic stability and wellbeing depends on two conditions: their partners keeping their income, and their families staying together (Gornick and Jantti 2010). Dependence reduces the ability of women to get a source of stable income after separation (either through a good job or from a pension), whilst also leaving her with fewer assets and wealth. Government data ignore how households operate as financial units and how money is distributed within them.

Government policies are structured around the traditional family unit, which increases dependency upon the male breadwinner. HWF encourages one parent into employment. The structure of UC creates incentives for single-earner households, due to the withdrawal of benefits from two-earner households. Furthermore, UC is paid in one lump-sum into one bank account (usually the primary earner’s). These measures are likely to increase incidences of households with one primary earner and a partner that is either a second earner or not earning. Women are much more likely than men to be the latter, increasing their dependence upon their male partners.

It is much more difficult for individuals to leave relationships upon which they are economically dependent. Individuals struggle to support themselves financially within a single-parent or single-adult household after separation if they were previously unemployed. This therefore increases the risk of poverty if they do decide to separate (or are forced to separate), as they become less able to gain employment and have fewer assets to depend upon.

A separate cause for concern within the structure of the family is the link between child poverty and women’s poverty. HWF, despite being a policy to combat child poverty, does not recognise that one of the root causes of child poverty is the poverty of their mother. This is particularly the case within single-mother households, but it holds for couple households too. This is due to the nature of resource distribution within a household, in which women are largely responsible for budgeting and providing for children. Failing to address women’s poverty as a separate issue will make policy aiming to combat child poverty less effective.

Conclusions

My conclusions are that austerity measures are likely to increase the proportion of women living in poverty relative to men. Furthermore, HWF is unlikely to be effective in achieving its goal of reducing child poverty in light of both the insufficiency of the Troubled Families Programme and the adverse effects of austerity measures.

To prevent this, I propose three actions for the government:

  1. To provide more flexible childcare facilities and place a cap on childcare costs, or provide more child benefit in order to cover the current costs that are keeping many women from work. Failing to recognise that adequate childcare is the main barrier to employment for women makes other measures to increase employment much less effective.
  2. To re-think the changes to Universal Credit due to their gendered effects. Reductions in the Work Allowance (the amount that recipients can earn before their benefits start being withdrawn) have hit women particularly hard, due to their greater dependence on the welfare system. These reductions are responsible for a quarter of the projected increase in poverty among children in working households by 2020/21, according to the IFS (2017a). The government should increase the Work Allowance and re-instate the payment of benefits into separate accounts, particularly for child benefit. This would reintroduce a stable source of independent income for mothers.
  3. To act in accordance with the UK Equality Act of 2006, which is a legal obligation to pay ‘due regard’ to gender equality when making decisions relating to spending plans. In order to do this effectively with regards to poverty, the government should collect disaggregated data on income, poverty and dependence within households (Millar 2003). Furthermore, it should focus on the root causes of women’s poverty, which lie in entrenched social structures that prevent women from gaining access to the labour market. This requires a long-standing commitment to social change, not quick-fix measures that improve poverty rates in the short-term. This would reduce women’s risk of poverty in the future.

Overall, the government is not doing enough to combat the entrenched nature of women’s poverty. This is either through ignorance – since official statistics conceal the true extent of this poverty – or because neither women nor poverty are the priority of policymakers in a time of austerity. This is apparent in current policy, which fails to recognise the link between women’s poverty and children’s poverty and largely ignores the plethora of studies detailing the necessity of better childcare. The subtle enforcement of the traditional nuclear family in the incentive systems employed by the government’s welfare system is outdated and ineffective, not to mention detrimental for many women in single-parent households and economically trapped in couple households. The disregard for women’s poverty is also apparent in the dearth of information concerning women’s individual income and resources, which prevents the exposure of hidden poverty within many households. The current government should be held to account for this injustice, particularly given that the Equality Act of 2006 provides the legitimate grounds to do so.

The problem of poverty should be the priority of policy makers, not only for those focused on social injustice but also for those seeking economic benefits. The policies that I have put forward would encourage more women into meaningful employment within the labour market, contributing to economic activity and tax revenues. The cost of increased spending on public services, particularly child care services, is likely to be mitigated by the increased economic activity. In 2011, the IPPR published a report making the economic case for universal childcare: on the basis of their cost-benefit analysis, they show that universal childcare pays a return of £20,050 over four years to the government. This is in terms of tax revenue minus the cost of childcare for every woman who returns to full-time employment after one year of maternity leave. The current report is focused upon the structural injustice faced by women, thus its argumentation does not hinge upon the economic benefits of the approach. However, further research should be conducted in order to analyse the further economic benefits that the policies outlined are likely to have.

About the author

Ellie Mae MacDonald is a third-year undergraduate reading Philosophy, Politics and Economics at the University of Oxford. She is a Moritz-Heyman scholar (for students from low-income backgrounds) as well as an academic scholar. In previous research projects, she has used quantitative methods to analyse the impact of proportional representation upon gender and wealth inequality and the motivations of UN peacekeeping initiatives. She has produced this current paper as a research project at the Global Policy Institute, a London think tank focused on international affairs. After graduation, she hopes to pursue a career in research with an international organisation, focusing on humanitarian or gender-based issues.

For a copy of the full report, please email Ulrike Rub-Taylor at ulrike.rub@fedtrust.co.uk