Poverty has always been an emotive subject, conjuring images of Dickensian destitution and abject living conditions. But in recent years a different form of poverty, in-work poverty, has grown and redefined our understanding of the word’s meaning.

If you were in poverty in previous decades, the chances are that you did not have a job. But this is no longer the case. Most people living in poverty are now in working households. The reason they are in poverty is not because they are ‘feckless’, or lazy or opted out of hard-work, it is because their employers pay them a pittance – a wage so poor it doesn’t even cover the basics for a decent standard of living.

One in five workers in the UK is now low paid, one of the worst rates among developed countries. This includes 279,000 people who are paid below the National Minimum Wage. There is a real human cost to this, as extensive research has shown chronic physical and mental health effects of low pay. But there is also a very clear economic cost as well.  According to House of Commons statistics, 478,000 people with jobs claimed housing benefit in 2009/10, rising to an expected 962,000 this year. On current trends, the number of claimants will increase by a further 276,000 to 1,238,000 in 2018-19. The cost to the taxpayer has climbed from £2.2bn in 2009/10 to £4.6bn this year and to a projected £6bn in 2018-19.

Government subsidies to cover housing costs for those in work shows something has gone horribly wrong. In-work poverty is now so prevalent in the UK it is in danger of become an accepted norm. But there are ways it can be tackled. The first, and most obvious way to do this, is to make sure people are paid a fair wage.

Of all the ways to achieve this, the Living Wage is perhaps the most high-profile. Numerous organisations have championed the Living Wage as a way to reduce in-work poverty and economic inequality, and today we’re proud to announce that The Equality Trust is now an accredited Living Wage employer.

We’ve discussed here before the different ways in which the Living Wage may be adopted more widely, as well as the importance that implementation is done well to make sure it reduces rather than increases inequality.  But more than anything else, the Living Wage provides an important benchmark for pay that offers employees a dignified living.

Low pay is an issue belatedly gaining the attention of our politicians, as is excessive pay at the top, where executives have seen their pay accelerate at astonishing speed. The Living Wage, if implemented properly, would help to improve pay at the bottom. But it would also provide an important step to reduce the excessive inequality between ordinary employees and those at the very top.

John Hood Media and Communications Manager.