hard times | 

A job and a third-level degree ‘no longer enough to protect people from poverty’

Young people and workers on low incomes are under the most pressure as rents soar

Most working poor households rely on part-time and minimum wage workers in “elementary occupations” such as cleaning, manufacturing or food preparation. Photo: Stock image

Sarah CollinsIndependent.ie

A third of people below the poverty line last year were in work, and many of them held a third-level degree, research shows.

Lone parents and part-time workers are particularly at risk of falling on hard times.

Renters also face a far higher risk of poverty than homeowners, after private rents soared 84pc since 2012.

A study by the Economic and Social Research Institute (ESRI) has revealed the scale of deprivation and poverty in modern Ireland.

There were 625,000 people below the poverty line last year, with 220,000 of those in work.

The figures rose substantially when housing costs were factored in.

The study found young people and workers on low incomes were now under the most pressure as rents soared.

Low mortgage rates over the last decade have helped shield homeowners from rising housing costs, the ESRI said. Housing supports have eased pressure on the poorest.

However, Ireland is now entering into a new era of rising interest rates, with the European Central Bank yesterday imposing the third rates hike since July.

The ESRI found that lone parents and those on rental supports are much more likely to be below the poverty line while in work.

Most working poor households rely on part-time and minimum wage workers in occupations such as cleaning, manufacturing or food preparation.

That is despite the majority (56pc) of working poor households having someone with a third-level degree.

ESRI economist Paul Redmond, one of the report’s authors, said such “in-work poverty” is an area of concern. “It is linked to lower well-being and social exclusion,” he said.

Ireland’s in-work poverty rate is low compared with other countries – at 4.4pc of the working age population, it is half the EU average – while overall poverty and inequality rates have fallen substantially in the past decade.

The bulk of the “working poor” (34pc) are private renters, although 27pc own their homes outright, while 22pc are on rental supports. Those on rental supports make up just 7pc of working households above the poverty line.

Almost a quarter of the working poor (24pc) are lone parents. This bracket makes up just 5.5pc of working households above the poverty line.

Private renters who do not qualify for assistance were up to four times as likely as homeowners to fall into poverty last year, when housing costs are taken into account.

Most poverty and inequality measures do not factor in housing costs.

“Despite rising house prices, for the majority of the population [who own homes] housing costs have been falling, while for private renters, they have been shooting up,” ESRI economist Barra Roantree said.

The majority of Irish households are homeowners. Last year, 5pc with a mortgage were below the poverty rate, when housing costs were taken into account. Mr Roantree said housing supports would have to remain in place until more housing supply came on stream.

“Addressing the challenges of housing affordability highlighted in our report will require a sustained increase in supply, particularly of social and cost rental housing.”

The study also showed rising unofficial poverty rates for people with a disability.

More than two-thirds of the 695,000 who considered themselves “materially deprived” last year – unable to afford two or more items from a list of 11 essentials – had incomes above the poverty line.

But almost half lived in a household where someone reported having a disability. The ESRI said current poverty measures do not account for the “substantial extra costs of living” faced by people with a disability.


Today's Headlines

More Irish News

Download the Sunday World app

Now download the free app for all the latest Sunday World News, Crime, Irish Showbiz and Sport. Available on Apple and Android devices

WatchMore Videos