Book/Report Chapter

Low pay, in-work poverty and economic vulnerability

January 26, 2018

Handbook on in-work poverty, Chapter 8, pp. 124–145

While those working part-time or in work for only part of the year are more likely to experience poverty, those working full-time all year and still not managing to avoid poverty are also a source of particular concern. This chapter investigates the extent and nature of low pay for these workers and its relationship with household poverty and economic vulnerability across European countries. In 2006, before the onset of the economic crisis, the percentage of these employees below two-thirds of median earnings varied across countries from 10 per cent up to almost 30 per cent. Relative income poverty was then a rare phenomenon for those who were not low-paid, whereas the low-paid faced a much higher poverty risk. In 2013 the pattern of low pay for these workers was quite similar, despite the economic turmoil, and there was little or no increase in poverty risk vis-à-vis relative income thresholds for those who were not low-paid. For the low-paid, there were some quite sharp increases in the risk of poverty, but only in certain countries. In both years the likelihood of a low-paid worker being in a household below the at-risk-of-poverty income threshold was linked to gender, age and, in particular, the presence or absence of other earners.