The Cost of Work: Insights from Minimum Income Standards Research for Ireland
Being in work, or taking up work, incurs additional costs on households and individuals. Depending on circumstances, additional needs arise regarding travel, fuel, personal costs and childcare among others. While the existence of these additional costs is regularly cited, it is rarely quantified and incorporated into assessments of employment activation or the adequacy of earnings; in particular for low income individuals.
This paper attempts to estimate the nature and scale of these additional costs of work using results from a year-long research project which has established the cost of a minimum standard of living for a variety of Irish family types. A minimum essential standard of living is defined as one which meets a person's physical, psychological and social needs. To establish this figure, the research adopts a consensual budgets standards approach whereby representative focus groups established budgets on the basis of a households minimum needs, rather than wants. These budgets, spanning over 2,000 goods, were developed for sixteen areas of expenditure. The analysis distinguishes between the expenditure for urban and rural households and between those whose members are unemployed or work (part-time/full-time).
Finally the paper considers the results of this analysis in the context of earning levels, taxation (tax credits and bands) and the growing literature on the concept of a 'living wage'.