JRF - Minimum Standard of Living

[Marmora Man]

According to the Joseph Rowntree Foundation (JRF) Report into Minimum Income Standard a single person in the UK needs to earn at least ?16,400 a year before tax in 2012, to afford a minimum acceptable standard of living, while two parents need to earn at least ?18,400 each to support themselves and two children.

This is based upon the costs of providing what a survey of the public has determined what comprises a minimum acceptable standard of living in the UK. THe survey has taken place every year since 2008.

* In some areas of life, however, the minimum has gone down. For example, in today's harsher economic climate, pensioners and families with children specified lower minimum budgets for eating out and for exchanging Christmas and birthday presents.

* In other areas, new requirements have emerged since 2008. Computers and the internet are now considered necessities for all working-age families.

* Families with children living in urban areas outside London stated that a car has become essential to meet an acceptable living standard.

* Since 2008, actual incomes have risen much more slowly than minimum income requirements.

* In addition to the effect of higher living costs, cuts in tax credits for families with children have outweighed the benefit of higher tax allowances.

What interested me were the quotes of various spokespersons who were, in general, suggesting that something must be done about the gap between average incomes and the JRF assessed required level of income.

Oxfam's director of UK poverty, Chris Johnes, commented: "Yet again we are seeing evidence of working families being hit hardest by a perfect storm of soaring living costs and cuts to services and crucial support, like working tax credits.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, said: "Families have a monumental task trying to earn enough to get by. This year's research shows that a dangerous cocktail of service cuts and stagnating incomes are being keenly felt by parents.

Both seem to imply that the shortfall should be made up through government (aka taxpayer) funded benefits - which begs the question as to how these government / taxpayer funded benefits can be afforded.

So questions:

a. "Should the JRF Survey also ask, alongside what constitutes a minimum standard of living, how that minimum standard of living should be funded"

ALSO

b. "Would the answer to what constitutes a minimum standard of living change if it were made explicit that the only way of closing any funding gap would be an increase in the cost of benefits"

[????]

I'm not sure the survey actually asks those qusetions MM, I think it just asks participansts to assess what they think is an minimum adequate allowance? The comments about this minimum decent wage are then added by the usual suspects. Can of worms and really difficult issues. In all honesty the amount seems about right to me, but does that meany every individual/family shpould get this? if so it's pie in the sky, money tree thinking, the country can't afford it.

My belief is that work needs to be rewarded and my preference is thst this done by taking less tax off the individual/family that are working than by giving it back via tax credits or benefits so there has to be signifcant differences between income from work and non work and the result of that will be an incraese in the gap between those on benefits and the rest. The raising of the tax allowance for low income workers to hopefully ?10k is the best things that the Lib Dems have bought to the table as far as I'm concerned. I also have changed my view on the minimum wage thinking that it is a neccessity now to rewerd work - I'd also like all businesses in the UK to have to say whatt they pay as a minimum wage oversaes and in the UK plus the gap between highest and lowest earners, UK consumers can then make their choice about buying from companies ethichally if they so choose. We, people, consumers, ulitmately have the power so stop monaing aboiut the banks and move your account to the co-op etc. Sorry, very quick response but a start.

[????]

Anyway, all this stuff get's the same answer

Q; Should pensioners/families/those on benefits/retired doctors/students etc etc get lots of money?

A; Yes of course

Q how will we pay for it?

A1; Go away you Tory scum etc etc

A2; the rich*

*anyone richer than me......in reality far fewer tha you'd think.

[StraferJack]

1st answer > 2nd answer

[????]

do you mean A1 > A2 OR post 1 better than post 2 :)

[StraferJack]

Quids a1 > quids a2

[Jeremy]

You missed out the other standard answer.

A3; Scrap Trident/Olympics/Royal Family.

[Loz]

A4: Implement a Robin Hood tax, which will raise ?500bn an hour for good causes and solve every problem you could ever think of.

[Carter]

Tax his land.

Tax his bed.

Tax the table at which he's fed.

Tax his work.

Tax his pay.

He works for peanuts anyway!

Tax his cow.

Tax his goat.

Tax his pants.

Tax his coat.

Tax his tobacco.

Tax his drink.

Tax him if he tries to think.

Tax his car.

Tax his gas.

Find other ways to tax his ass.

Tax all he has then let him know

That you won't be done till he has no dough.

Tax the power that he needs.

Tax the very air he breathes.

When he screams and hollers, then tax him some more.

Tax him till he's good and sore.

Then tax his coffin.

Tax his grave.

Tax the earth in which he's laid.

When he's gone, do not relax.

It's time to apply the inheritance tax.

[Chippy Minton]

Oh great. Charlie Reese - the man that inspired the TEA Party! Why should we have pay for ANYTHING!!!

[david_carnell]

???? Wrote:

-------------------------------------------------------

> My belief is that work needs to be rewarded and

> my preference is thst this done by taking less tax

> off the individual/family that are working than by

> giving it back via tax credits or benefits so

> there has to be signifcant differences between

> income from work and non work and the result of

> that will be an incraese in the gap between those

> on benefits and the rest. The raising of the tax

> allowance for low income workers to hopefully ?10k

> is the best things that the Lib Dems have bought

> to the table as far as I'm concerned. I also have

> changed my view on the minimum wage thinking that

> it is a neccessity now to rewerd work - I'd also

> like all businesses in the UK to have to say whatt

> they pay as a minimum wage oversaes and in the UK

> plus the gap between highest and lowest earners,

> UK consumers can then make their choice about

> buying from companies ethichally if they so

> choose. We, people, consumers, ulitmately have the

> power so stop monaing aboiut the banks and move

> your account to the co-op etc. Sorry, very quick

> response but a start.

I've deleted the opening para of your response Quids, because it just irritates me (the "money tree" again?!) and I'd rather try and keep this civil.

And as it happens, because I happen to agree with almost everything you've written in the second paragraph, quoted above.

Transparency on pay would be an excellent start. As would transparency on costs and profits. If supermarkets were forced to reveal how much profit they make on, say a kg of carrots and what the farmer receives, then I think it would inform a new way of thinking.

I'm glad you now support the NMW and would hope you would also support its rise to a level that would bring it closer to the point where the living standards described in the report.

I hope I'm right in thinking that MamoraMan, yourself, Loz and Jeremy (hereby known as the 4 horsemen) would like to see a society where living standards for the vast majority met those described. I suspect we have very different methods of reaching it however.

It's not that the money isn't there. It's what and whether and how we choose to spend it.

[Marmora Man]

D-C said "I hope I'm right in thinking that MamoraMan, yourself, Loz and Jeremy (hereby known as the 4 horsemen) would like to see a society where living standards for the vast majority met those described. I suspect we have very different methods of reaching it however".

You're right - I would like everyone to have a decent standard of living but I believe it is not a relative matter but an absolute marker. I also believe that it cannot be set without reference to its cost.

The situation mirrors discussions held with children flying the nest for the first time. They are often used to a certain standard of living at home and, understandably, want to replicate that standard in their new accommodation. However, this is usually unaffordable on entry level salaries - large bathrooms, fully fitted kitchens, power showers and hi end broadband and cable TV do not come cheap and so, gradually, these children have to lower their sights; settling for the rougher and smaller properties and recognising that it may take years to reach a position where they can afford these luxuries.

Same with the JRF standard of living. It is a sensible aspiration but it takes time to accumulate all aspects of this minimum. In my youth and immediate post student life I went without holidays sometimes in order to afford a car, to repair the car I sometimes cut down on living (eating) expenses [one memorable month was spent living predominantly on military 24 hour ration packs], to replace the broken fridge I "borrowed" from the money set aside to pay the rates and so on.

By the bye - Tesco's net profit for 2011 was 4.6%, which is hardly gouging the consumer.

[StraferJack]

DC - I'm not sure you can lump MM, quids, Loz and Jeremy into the same category. Economically Jeremy and Quids might be conservative but by and large I think they have far more in common in political terms with you than, say, say MM.

I can't agree with MM's analogy about children leaving home at all however. What is happening socially and economically is that instead of fleeing the nest and aspiring to and working towards a bigger, better standard of living, the children are leaving home and most of them stand not a chance of progressing on the housing ladder. Even renting in a house share becomes untenable after a while these days and many of those offspring return home

I accepts MM's experience and life are true and meaningful to someone of his age - but it's unlikely many people could follow the same trajectory again at current house prices vs earnings differentials

I'm not sure profit can be expressed simply as a percentage either - 4.6% of what?

Nor did DC say Tesco were gouging the consumer. I suspect he was implying that the suppliers are being gouged and it would be helpful to the consumer to see the transparent cost of what they are buying

[El Pibe]

I thought the general trajectory these days was to leave home in your thirties, though this might have more to do with putting off growing up rather than housing ladders.

I left as soon as possible and my first four years in London I probably averaged about 7 grand a year by, like MM, prioritising certain things.

So out went a nice place to live and food and stuff, but goddam did I have fun!!!!

[StraferJack]

exactly Pibe - but equate that income and your outgoings on accomodation then with equivalent today and is that still doable?

[El Pibe]

I imagine it is, you didn't see where I lived :-/

To be frank I sometimes feel poorer these days such are my outgoings!

[DaveR]

If you ask the public to determine the minimum acceptable standard of living, and what they come up with costs more to provide than the incomes of a sizeable proportion of the population, then it's not surprising that it will be met with calls of 'something must be done'. It doesn't matter whether you accept various analogies/anecdotes about how achieving an acceptable standard of living is a process rather than an instant outcome - it's just a fact that many people don't have the standard of living that ideally everybody would have, and no magic wand will make it so.

In truth, the JRF report doesn't take us any further than the two fundamental questions that we are all entirely familiar with and have been debated, in one form or another ad infinitum, i.e.

- how can countries get richer; and

- how can that wealth be shared equitably

with the follow up questions of whether you have to choose between the two (to any extent) and the proper role of government in either. Unless you really believe that it's as simple as:

"It's not that the money isn't there. It's what and whether and how we choose to spend it."

MM poses this question:

"Would the answer to what constitutes a minimum standard of living change if it were made explicit that the only way of closing any funding gap would be an increase in the cost of benefits"

I think there is a more direct question that is already being posed, in surveys and the populist press, which is:

"Should people ever be better off on benefits than in work?"

and the answer that is being suggested ("no") leads to some interesting conclusions i.e. NMW and high income tax thresholds are a good thing (as Quids said) but so is holding down benefits levels, and that it is necessary to be rigorous about separating those who can't work from those who can but for some reason aren't in work.

[StraferJack]

regulate rents and you can decimate the benefits bill - read about the family claiming 4 trillion pounds a year? That'll be because 3.9999999 trillion is going on rent to some landlord (and yes I have been a landlord myself - I'm not saying ALL landlords do this)

as for this notion of people choosing not to work - you'll always have a small minority but I think most of the people unexpectedly unemployed in the last few years haven't chosen to do so

[DaveR]

I put it very carefully - it's not a question of choosing not to work, but simply whether you are able to work or not. Recognise this quote?

"I grew up in the '30s with an unemployed father. He didn't riot. He got on his bike and looked for work, and he kept looking 'til he found it."

If you believe the opinion polls, the British public are having a Tebbitt moment.

The serious argument in its most basic form is that society may have an obligation to provide a minimum standard of living of the sort described by the JRF for those who are incapable of paid work, but not for those who simply don't have work. For the latter the system should always incentivise working over not working, and the expectation is that people do whatever it takes to get into work.

You can regulate rents, or you can cut the level of housing benefits - which you choose is (it seems to me) dependent on whether you see it as a market distortion issue or a 'punish greedy landlords' issue. I tend to favour the former, but the net outcome should be the same in economic terms, and arguably its fairer overall. One of the reasons why people can't get on the housing ladder is because of the excessive rents paid out of the benefits budget for modest housing in expensive neighbourhoods.

[right-clicking]

It was not so long ago the conservative government had the brainwave to sell off all the social housing, it enabled those recipients access to credit and a foot on the housing ladder, and had the result the old bird was looking for; to dig our way out of recession and get the hoards buying again. Shame! At that time I was living on a small (200 abodes) council estate. We had a resident caretaker, two part time wardens that worked to ten pm, one full-time gardener and two part timers, and a laundry, our house was decorated by council employees and yes somehow all this was paid for from rents!!

Now with buy to let landlords whom use the local housing allowance as a benchmark on how much they can squeeze, how can anyone wonder where and why the social bill is so expensive?

Laying fault on the unemployed is pointless, 90% want to work (I am sure) 80% are not getting the few jobs available. Minimum wage has given employers an excuse to pay just that amount (or a little more) Profit goes on more productive work-practices and technology to cut the labour costs.

I have been without work for four years, I have applied for over 500 jobs and have received eight replies and three interviews, but I am labelled as work-shy lazy and happy with the handouts Laugh Out Load, Not.

I have two kids at primary school and I dream of a job that would pay me enough to support us all! before I was made redundant I was in receipt of housing and work tax benefits, sounds to me the UK governments are subsidising industry as well. Had I received a decent living wage from my exploitive employer, the need for benefits would diminish leaving the cash for those without work.

In times of recession those in the position of wealth and power always turn on the poor to maintain their own bank balance, nothing new there. in a country as rich as ours I feel ashamed at the injustice and abject poverty a lot of us suffer, if it was not for my credit card and overdraft, surviving on benefits would be next to impossible.

[Chippy Minton]

Sadly, tales like yours R-C continue to grow. It's the growth of firms like Wonga that now seem to be everywhere that demonstrate this more than anything for me, and people aren't using these firms to pay for "fully fitted kitchens, power showers and hi end broadband and cable TV," it's far more base than that - housing, food etc.

[Jeremy]

DC, you're right that of course I'd like to see decent living standards for everyone, but I'm generally more in favour of facilitating the means for people to attain it (including minimum wage and decent education), rather than providing it directly.

I've never really considered myself to be conservative (with either a small or large c), in fact I think in some respects you're more c©onservative than me, e.g. advocating high military spending.

[DJKillaQueen]

I think the wrong questions are being asked but 'rightclicking' touches on some of the real causal factors. The question should be 'why are so many in work unable to meet basic living costs?' (basic living costs being rent, food, utilities and taxes and travel to and from work). If we look at what proportion of below average saleries (and even some average ones) are spent on what it becomes blatently obvious that housing inflation has had by far the biggest impact over the last 30 years, followed by fuel. That tax has to be used to subsidise so many in full time work (namely to help with rent) is also the sign of a badly balanced economy.

I agree Jeremy with the importance of a decent minimum wage and education. But what I would also say is that there needs to be more investment in and a longer term view towards job creation. At present we basically just don't have enough jobs in most parts of the country. Living amongst the affluence of London can blinker the reality of life for the unemployed. And any job creation has to also be the right kind of job creation....not everyone is able to pass exams.

I can't see any government having the balls to address housing inflation (as we have also seen regarding a return to the regulation of banking). And massivley raising the minimum wage is fraught with potential problems for employers too. So for now it looks as though subsidising the lives of the working poor will have to continue.....which means what exactly? That we all will continue to pay the mortgages through our taxes of some property investors. As immoral as that may seem, it is not as immoral as squeezing the poor into even greater hardship.