Income is already known to affect health: for example, people in the bottom 40% of the income distribution are almost twice as likely to report poor health than those in the top 20%. We also know that income and health can affect each other. As well as lower income being associated with more ‘stressors’ which can harm health, poor health can also limit opportunities to find good, stable employment and thus affect income.
Persistent poverty – defined as having an income below 60% of the median for three of the last four years of data – is a particular problem, because it is associated with worse health than contemporary poverty (in poverty in the current year of data, but not three of the previous four years). Using Understanding Society, The Health Foundation found that in 2017/18, 30% of people in persistent poverty were in poor health, compared to 25% of those in contemporary poverty, and 15% of those not in poverty.
The effect on employment
The research also used Understanding Society’s Covid-19 survey to examine which groups suffered most from the pandemic’s impact on employment. It found that unemployment has been greatest for those who have in the past been on the lowest incomes. The number of people (both employees and the self-employed) who lost their jobs between January/February and April was twice as high for those in the bottom income quintile as for those any other quintile (7.2% compared to 3.2-3.5%). Employees in lower income quintiles are also more likely to have been furloughed: around 28%, compared to 17% in the top quintile.
The Health Foundation also suggests that people were not ready for an economic shock. The pandemic arrived at a time of high employment, but the recovery in jobs after the 2008 crash was not matched by an increase in the quality of employment. Many of the gains since the financial crisis had been largely in part-time, self-employed, or temporary work, and incomes, particularly for working-age families, had stagnated.
Although the impact of employment and earnings loss on household income is lessened by the Job Retention Scheme and Self-Employment Income Support Scheme, hardship is expected across the income distribution, and the consequences are likely to be more severe for lower-income families. They tend to spend more of their incomes on essentials, giving them less room to manoeuvre, and to have fewer, or no, savings to fall back on.
Policy recommendations
The Health Foundation makes a number of recommendations, including thinking of public health and economic growth as linked, rather than things which the government has to choose between. Economic policies can create incentives to protect health. Statutory sick pay, for example, is currently low, but could increase to help people who have to self-isolate. The government could also encourage practical support for people who need to retrain to find a new job – and financial support for those who rent privately and face eviction. Because there will be more people wanting jobs than opportunities available, the Health Foundation suggests benefit conditions should be less harsh than they have been in recent years.
In the longer term, reducing the burden of poverty would also reduce the future burden on the nation’s health. For example:
- more affordable housing would decrease the pressures on family incomes from housing costs
- more investment in early years services and childcare would support children in poverty
- and better quality, higher paid work, and better local welfare provision would protect the most vulnerable.
Finally, the Health Foundation says, a cross-government health inequalities strategy could include action to boost incomes as part of the government’s aim to ‘level-up’ opportunity across the country.
This blog was originally published in Insights, our annual summary of policy-relevant research using our data
Adam Tinson’s original long read for The Health Foundation is available on their website
Authors
Adam Tinson
Adam Tinson is a Senior Analyst in the Healthy Lives Team at The Health Foundation
