Donald Hirsch

Comparing the Minimum Income Standard in the UK and Japan: Methodology and Outcome

Minimum Income Standard (MIS) research involves an innovative methodology that combines consensual decisions made through discussion by members of the public, supported by input from experts. MIS addresses questions about income adequacy, and in particular, what is the income that people need in order to reach a minimum socially acceptable standard of living. The first MIS for Britain was published in the UK in 2008, and in 2010 researchers from Japan and the UK began to collaborate on developing a comparable Minimum Income Standard for Japan. This article discusses the differences and similarities between the UK and Japanese MIS. It looks at the challenges of applying the methodology in a very different setting and compares the results of the research in the UK and in Japan. Although there are notable differences in the lists of goods and services that comprise the budgets, there are also some striking similarities. This research suggests that the MIS methodology offers an approach that can be used in different countries to inform discussions on contemporary living standards and societal norms, and to enable international comparisons to be drawn.

Paying for Children: The State's Changing Role and Income Adequacy

In a number of countries, the state has become more closely involved in helping low- income families with children to make ends meet - including those with low earnings as well as out-of-work families. The adequacy of such support can be assessed against benchmarks measuring the additional cost of a child in households that maintain spending at a level sufficient to participate adequately in society. A socially defined minimum income standard provides an empirically based benchmark, which allows more meaningful measurement of adequacy than measures based on relative income or actual spending patterns. Using evidence from the Minimum Income Standard for the United Kingdom, this paper considers the extent to which the UK state covers the additional cost of having children for non-working and low-earning families respectively. It finds that the present system has come close to covering this cost for some low-income families, but has started to withdraw from this position. The paper concludes by considering advantages and pitfalls for countries of adopting targeted forms of support for children focused on income adequacy. Such support can help working as well as non-working families escape poverty, but also makes them heavily dependent on state transfers to make ends meet.

Contemporary UK wage floors and the calculation of a living wage

Purpose The purpose of this paper is to describe how the voluntary living wage (LW) in the UK is set. It examines how this calculation relates to contemporary approaches to setting wage floors, both in relation to their goal of supporting adequate living standards and in relation to the place of wage floors in the labour mark. Design/methodology/approach The paper examines how compulsory and voluntary wage floors are being determined, in the UK and in particular the role of public consensus in contributing to the calculation and adoption of a LW. It then reflects on the future sustainability of a system of wage floors in which the concept of the LW plays a significant role. Findings The central finding is that widespread support for wages delivering socially acceptable minimum living standards has transformed the context in which low pay is being addressed in the UK. The LW idea has stimulated more decisive efforts to do so; however, if a compulsory version of a LW were to reach a level shown to be harming jobs, this could seriously undermine such efforts. Moreover, the extent to which adequate wages are compatible with high employment levels can also be influenced by state support for households, especially tax credits and Universal Credit. Originality/value The paper clarifies how the setting of the UK LW contributes to objectives related both to living standards and to labour markets, and critically addresses some key issues raised.

The additional cost of disability: a new measure and its application to sensory impairment

Abstract This article introduces a method using consensual budget standards to estimate additional costs incurred by households that include disabled people with specified impairments. The article reports on a first application of this to UK single adults with sensory impairments. Using the Minimum Income Standard method, the research aims to identify the cost of disability by working with groups of disabled people to agree what additions to minimum budgets for non-disabled people are required for someone with a given impairment. This provides a more tangible account of the cost of disability than economic analysis of living standards achieved by disabled and non-disabled people, and adds to surveys of actual spending on additional items, which do not account for unmet need. The research on vision and hearing impairment yields new insights into costs arising from the way disabled people live their everyday lives, not just from spending on adaptations and equipment.

The ‘living wage’ and low income: Can adequate pay contribute to adequate family living standards?

The success of the contemporary ‘living wage’ movement has been highlighted by the UK government’s decision to increase the statutory minimum wage for over-25s sharply, in the name of improving living standards. This breaks with neoliberal reluctance to intervene in labour markets, yet raises difficult issues centring around whether minimum hourly pay rates are suited to promoting adequate household incomes. At worst, ‘living wages’ could distract from other policies with this objective. This article acknowledges recent critiques of the living wage as an anti-poverty measure, but demonstrates that, in combination with other policies, wage floors can play a crucial role. It shows that low pay and inadequate working incomes overlap substantially. The article argues that governments promising that work will deliver adequate living standards need a clearer narrative in which pay, public transfers/subsidies and sufficient levels of employment combine to deliver minimum acceptable living standards for working families.