News and Comment

Child poverty, social mobility, and the ‘squeezed middle’

Wednesday 23 October 2013

As you’d expect from a 247 page document plus appendices, the first State of the Nation report by Alan Milburn’s Social Mobility and Child Poverty Commission painted quite a comprehensive picture of the social conditions present in Britain today.

And – as you may also expect for a study conducted in today’s challenging times – this picture is not one in the chocolate box style. If not alarming, the headline-making statistics are still depressing: child poverty has risen significantly in the last 15 years, the Government looks set to miss its 2020 reduction targets by ‘a considerable margin’; and inequality has widened with privileges and disadvantages becoming more entrenched.

Perhaps more surprising however was the Commission’s assessment of the groups which have been most affected by present circumstances and the Government’s policy of ‘fiscal consolidation’:

“The lowest-earning fifth of households are making a larger contribution than any other group except those in the top 20 per cent, both as a proportion of their incomes and in absolute terms.”

The Commission went on to say that this is “placing an unfair burden on the poorest households – including those in low paid work – at least in the short term.”

I say surprising, because at the same time as the report’s release newspaper headlines were filled with stories of “Cameron’s tax promise aimed at the squeezed middle” and “Miliband’s offer to the squeezed middle.” The popular perception is that the section of society which has been most affected by rising living costs and a reduction in state support is those earning low to middle incomes, who’s wages have not kept pace with their expenses.

What the Commission’s State of the Nation report tells us is that this ‘middle’ group is indeed being squeezed – “struggling to keep up with bills, let alone savings” they say – but that “material disadvantage is most pronounced at the bottom of society and it is experienced far more widely than people imagine.”

So why all the attention on this group, which although struggling, is actually struggling less than some others? The cynical view is that because they’re seen as an electorally significant and potentially ‘winnable’, this group is given disproportionate political and media attention. While there is certainly some truth in this, it neglects to consider how unusual present circumstances are for those in this situation. If OBR forecasts are to be believed this Parliament will be the first since 1929 when average earnings have fallen since the last election. These falling living standards mean that many children, including those from families with above average incomes, now face the prospect of having lower living standards when they become adults than their parents. In this way the report acts as a sobering reminder of the two-way nature of social mobility – “almost half of individuals in Britain find themselves poor at some point over a nine year period” we are told.

The Commission’s report also encapsulates the cruel paradox that comes with harder times. The challenges of reducing child poverty and addressing a lack of social mobility are made considerably more difficult by precisely the circumstances which exacerbate their effects. As the author of The Spirit Level Professor Richard Wilkinson put it during our recent Changing Times blog series – “The problem of greater inequality is that it causes a greater need for public services at the very time there is typically less support for them.”

So what can be done? The Commission clearly states that they feel the life chances and social mobility strategy of the Government should be broadened so that it opens up “more opportunities for ‘squeezed middle’ families as well as low-income ones”. This sounds like a sensible idea, as does the one Dame Clare Tickell, Chief Executive of Action for Children, told OPM in August: “There should be something that asks about the impacts on children of any proposed changes…I think that it should be mandatory to ask will this [policy] impact badly on children? And if so, what do we need to do to mitigate that.”

Ultimately, although the findings of the Social Mobility Commission’s first State of the Nation report are not particularly positive, the fact that a Commission has been established with the remit to “hold government and others in society to account”, undoubtedly is. Another of our Changing Times contributors, the academic and author Professor Kate Pickett, felt similarly when we asked her whether she was optimistic about the future, saying:

“I’m optimistic that we’re having a public conversation about inequality that we couldn’t have had a few years ago, and that as austerity bites people will realise the value of public services and support and the role they play in creating a strong and caring society.”