Participation in the labour market generally has an enormous impact on the ability of individuals and families to move out of poverty with problems around both access to and progression within work helping to explain the strikingly different poverty rates across ethnic groups. The rates for those defined as persistently poor between 2009 and 2012 were 14.1% for individuals of Black African heritage, 13.7% for those of Pakistani heritage and 5.1% for those from White groups.
Some of this, especially for relatively new arrivals, can be traced to language issues - speaking English as a first language reduces the likelihood of being in persistent poverty by a substantial 5 percentage points. Weak English language skills are associated with the types of social and occupational segregation behind some groups’ disproportionate presence in work that is both poorly paid and which offers few prospects for progression. Pakistani and Bangladeshi men, for instance, are far more likely to be earning below the living wage.
However as the Women and Equalities select committee noted in its recent report on Muslim women, inequality, discrimination and Islamophobia also have a stark impact on people’s poverty risk. Muslim women are 71% more likely than White Christian women to be unemployed, more likely than women from other groups to be asked about their marital status or family aspirations in job interviews, and their participation in the workplace is greatly affected by the disproportionate number of hate crime attacks perpetrated against them.
For those at the start of their occupational careers, the likelihood that they will be able to escape low income adulthood is slim, and focussed government policy attention in both early years, through the extension of free childcare, but also in the transition between adolescence and adulthood, in reform to post-16 education is of the utmost importance. Young people who begin their working lives in low paid work find it difficult to move beyond this while those who experience early unemployment can be faced with longer term periods without work. The unemployment gap is high between ethnic groups – in 2014 young minority ethnic people had an unemployment rate of 28.6% compared with 15.5% for young white people.
This should be a cause of major concern. Earlier this month the Joseph Rowntree Foundation published a report Counting the Cost of UK Poverty in which we outlined the cost to the public purse of people being in poverty across a range of indicators including health, education and criminal justice. Poverty costs us all financially – £69 billion in spending on public services, with an additional 9 billion in benefits spending and lost tax revenue. The spend on education at approximately £10 billion, is a combination of the Pupil Premium and other targeted local authority work, and directly addresses support for children from low income families. Investment of this kind is showing results with BME school attainment on an upward trajectory, but unless more is done to smooth young people’s transitions into the world of work their poverty risk will remain high, with the broader cost of the harms caused by such inequalities difficult to express in financial terms.
Strategies to support transitions for poorer young people should include the provision of good quality careers advice, together with access to good quality apprenticeships and more effective widening participation activity from universities to address the woefully low representation of poorer young people across the higher education sector. These areas however require reform – high quality careers advice is patchy, and while the emerging Apprenticeships Levy may assist in incentivising employers to provide better quality apprenticeships, access for minority ethnic young people is low – 26% of those applying for apprenticeships are from minority ethnic backgrounds but only 9.5% are successful.
The new Prime Minister, Theresa May, has spoken of the clear inequalities that exist in the UK which can impact on life chances, employability and quality of life which suggests the possibility of renewed policy focus on early years, the criminal justice system and education among others. These are all public policy areas in which those from poor and/or minority ethnic backgrounds experience ongoing difficulties and initiatives to address these will be welcome.
It is clear that the financial cost of poverty to society, in the form of lost earnings and increased spend on areas such as health and education, can be reduced with effective action to tackle its causes and the broader impact of particular inequalities, such as discrimination in recruitment processes exacerbates this. These costs, while clearly tangible and measurable as we have shown, are also both moral and ethical and should contribute to our ‘collective shame’ – that within a prosperous society, the failure to support its most vulnerable members not only contributes to broader economic cost, but to social, material and psychological harm.
Dr Debbie Weekes-Bernard is policy and research manager at the Joseph Rowntree Foundation