IZA DP No. 15163: Poor Workers in Rich Democracies: On the Nature of In-Work Poverty and Its Relationship to Labour Market Policies
The working poor were long thought of as people toiling away in lousy, under-protected and underpaid jobs in places like fast-food joints, supermarkets, hotels and bars. The perfidious consequence of that perception was that in-work poverty was seen as a non-issue in countries with extensive labour protections, especially in countries with minimum wages at significant levels. The idea that the working poor were only to be found in the so-called "liberal" economies lacking strongly organized labour and proper regulatory correction has turned out to be completely wrong. In-work poverty exists in all rich economies. But what, exactly, do we mean by in-work poverty? How is it related to labour market trends and also to policies? And how might governments look to successfully tackle the problem of working poverty? In this paper, a draft chapter forthcoming in Clegg, D. and Durazzi, N. (eds), Research Handbook of Labour Market Policy in Rich Democracies, with Edward Elgar we provide some answers to these important questions.