Working and living below the poverty line: ‘The Working Poor’

Posted on January 13, 2015 by Micheál Collins

2015 looks set to be a year when those at the bottom of the earnings distribution receive increased attention. Government will shortly establish a low pay commission which will (among other things) review the minimum wage. Later this month the CSO will provide new data on incomes and earnings (SILC) and during the summer the Living Wage technical group will update its estimate of the hourly earnings required to provide a basic, yet decent, standard of living for a full-time worker. No doubt those described as the ‘working poor’ will be frequently mentioned.

Overall, 16.5% of the Irish population lives on an income which is less than the official poverty line – about €203 per adult per week. Given a population of approximately 4.6 million people this implies that almost 760,000 live at risk of poverty.

In the latest edition of the NERI’s Quarterly Economic Facts document, indicator 5.3 examines the composition of those living below the poverty line in Ireland. Of all the workers in the Republic of Ireland, 5.9% are ‘working poor’. When poverty among those aged 16 years and above is decomposed by principle economic status (the main thing that people do), those at work represent 12.6% of all those adults at risk of poverty.

A 2012 study by Eurostat, the EU Statistics Agency, provides some insight into the characteristic of this group. Using the 2010 EU wide Structure of Earnings Survey they examined those workers on low-earnings (defined as those earning two thirds or less of the national median gross hourly earnings). According to the survey, the low-wage threshold in 2010 was €12.20 per hour (it will have increased marginally since). Eurostat found that 20.7% of Irish workers are considered low paid and that low pay is more common among women, those with low education levels and workers with fixed duration contracts.

Low wages, limited hours, precarious employment and the sustained impact of the recession goes some way to explaining these figures. It also implies policy challenges; something the NERI will return to in future publication on low income, low pay and earnings during March of this year.

The latest edition of the NERI's Quarterly Economic Facts is available here.

Details of the Eurostat low-wage report are here.

Posted in: IncomeInequalityJobsLabour costsLiving wageWages

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