Poverty trap that awaits the working poor

It is huge, but it is largely hidden. Some signs are there to see - the homeless person on the street or the beggar - but the scale is not. Yet, every once in a while we get a glimpse of the frightening levels of poverty that persist despite a decade-long economic boom.

This week, for instance, we learned that a record 79,000 people have asked the Department of Social and Family Affairs for assistance with the costs of sending their children back to school. That represents one in every seven homes with children of school-going age. St Vincent de Paul revealed a few days previously that it will this year spend a record €34 million on helping people afford basic necessities such as food, clothing, electricity and heat this year.

In the glittering and self-congratulatory narrative that accompanies Ireland's economic success, the issues of grinding day-to-day poverty don't get a look in. After all, in a country with close to full employment and job opportunities for all, why should there be so many people experiencing so much hardship? The answer is that the nature of poverty is changing. It is not confined to the jobless, the disabled, the sick or the elderly. These days, a higher proportion of people with jobs are ending up in poverty than ever before: they are the working poor.

They are a group who qualify for almost nothing but pay for everything. Outside of the income thresholds for benefits such as back to school allowances, rent allowance or medical cards, they are exposed to the full brunt of cost increases.

While the rates of poverty have fallen, official statistics show the proportion of families which are at risk of poverty, even though the household is headed by an employed person, increased by almost 50 per cent during the boom years. Translating this into numbers, the EU's most recent survey on income and living conditions showed that in Ireland almost 140,000 employees out of 1.98 million were living at risk of poverty.

Even those few entitlements directed at low income families feel more like a sleight of hand than a hand-out. The doctor-only medical card - the income threshold of which has been lowered recently for the second time - entitles someone to free GP visits. Yet that person may not be able to afford the prescription to tackle their illness.

Inflation - now running at 4.2 per cent, well above the EU average - devours a greater share of the working poor's income, because they have less of it in the first place.

And then there are the big hits coming down the line, such as gas price increases of almost 40 per cent later his year and an expected ESB price hike of between 10 per cent and 20 per cent.

All this means that many who assist the marginalised or working poor feel increasingly that they are helping people to manage their poverty, not to escape it.

The phrase "welfare to work" was once a slogan of hope. For many, it is now just a transition with little change in circumstances: life is still dogged by the difficulties of struggling with household debt, trying to afford adequate heating and sparing enough for a substantial meal.

The gap between high earners and those on low pay is widening. The UN development programme's most recent report found that while Ireland was among the world's wealthiest countries, it was also one of the most unequal, with the third-highest level of poverty among the 18 industrialised countries surveyed. Figures from the Revenue Commissioners confirm this and show that more wealth is becoming concentrated in the hands of fewer people during the boom.

Poverty, whether affecting the working poor or the unemployed, will never be abolished without more equal incomes and lifestyles. It takes higher taxes to pay for better public services and education from infancy.

There is little doubt there have been improvements in helping to address poverty in more recent times. Social welfare recipients have seen real improvements in their living standards in recent years, while some of the most inequitable tax loopholes are being closed off by the Government.

But tackling poverty will take more dramatic steps. Overall, Ireland has one of the lowest levels of social protection expenditure in Europe. How we live has to become fairer in every way, without such sharp social divisions in wealth and opportunity, and with no housing ghettos or school segregation.

As a proportion of GNP, the Irish expenditure on social protection is 16.5 per cent, compared with the pre-enlargement EU of 27.3 per cent. In countries such as Sweden it is 32.3 per cent.

Social protection expenditure in this case doesn't just mean welfare. It includes expenditure on sickness, old age and disability. Societies with high levels of social protection typically have low levels of poverty risk.

If serious inroads are to be made into poverty, we need higher social protection expenditure, higher social welfare expenditure and greater equality in the areas of health and education.

While it is up to the Government to take decisions on how we address these issues, we as a society must also decide what sort of society we want.

Politicians alone can't do the heavy lifting of public persuasion alone. It needs all who command trust - the major charities, the professionals in health, education and religious groups too, in addition to all who rub up against poverty and its pernicious effects.

The evidence from many of our European neighbours is that substantial poverty reduction can be achieved with economic growth and radical anti-poverty measures. What is less clear is whether political leaders - and society at large - are willing to risk taking such bold moves.