The dignity of work is founded on the assumption that a fair day’s labour is exchanged for a fair day’s pay, yet mounting evidence shows that for a growing number of people, that contract has been broken.

The scandalous rise of in-work poverty was already exercising its punishing grip before the onset of the pandemic. In March 2020 – mere weeks before lockdown came into force in the UK – research from the Joseph Rowntree Foundation and the Institute for Fiscal Studies found that 60 per cent of those in poverty were from a working household. By their calculations, the poverty rate was the same as it was two decades earlier, even though the UK employment rate had improved by five percentage points.

The reasons for this are multiple, and were fuelled by the prolonged hangover from the 2008 financial crisis. While UK workers benefit from the protection of a national minimum wage, the law provides little to no shelter from the insecure work and zero-hours contracts prevalent across the gig economy that expanded to take up the slack through years of austerity and listless economic growth.

Fast forward through what felt like an interminable 18 months of Covid upheaval and we now find ourselves in a rather puzzling place where, on the one hand, certain sections of the population are struggling to find work and yet, on the other hand, employers across a variety of sectors are unable to get the staff they need. This paradox has been spawned to a great degree by the exodus of EU nationals in the wake of Brexit, but the conundrum of re-aligning available workers with the skills employers require is a separate topic for another time.

However as things stand, it has been suggested that skills shortages could give some bargaining power to job seekers in certain industries, some of which – such as hospitality, food production and social care – have traditionally been known for poor pay and conditions. If so, this is no bad thing, despite the predictable warnings about pushing up costs for businesses and consumers.

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For many, the minimum wage simply doesn’t pay enough, leaving them with little to contribute to the domestic economic activity that has gained importance in this period of Covid-related travel restrictions and lower European trade post-Brexit.

UK-wide research released last week by Investing Reviews found that for people of all ages across all cities, the minimum wage is an average of £294 per month less than the cost of living. Full-time workers over the age of 23 earning the minimum £8.91 per hour take home less than the cost of living in 13 of the 45 cities reviewed. Among their counterparts earning £6.56 per hour in the 18-to-20 bracket, only those from four cities are left with any disposable income.

Not surprisingly, seven of the 10 least affordable cities are in the south of England, with Westminster at the top. Edinburgh came in at number six on that list, with a shortfall of nearly £200 per month for those aged 23 and older.

Aberdeen was deemed Scotland’s most affordable city for those on minimum wage, with £284.50 left over after living expenses for those 23 and older. Their counterparts in Dundee have an average disposable income of £224.74. However, looking across all age groups down to the lowest rate of £4.30 per hour for those in the first year of an apprenticeship, those surpluses become deficits of £681.36 and £445.65 in Aberdeen and Dundee respectively.

The fact that so many workers struggle to cover the basics of food and shelter has been highlighted by the recent row over the UK Government’s decision to end the £20 per week uplift in universal credit that was brought in along with a raft of other emergency Covid relief programmes. According to the Royal Society for Arts, Manufacturers and Commerce, September 30 will be a “bleak day” for an estimated 660,000 low-paid key workers including nurses, supermarket staff and social carers.

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Movements such as the Living Wage campaign seek to address the issue by encouraging firms to pay the “real living wage” of £9.50 per hour outside of London. To date, about 7,000 employers across the UK have signed up, including more than 2,000 operating in Scotland.

Earlier this month, the Scottish Government announced that it will launch a further accreditation programme that will add the provision of secure contracts and flexible hours to the living wage promise. Known as the Scottish Living Hours Accreditation Scheme, employers will have to guarantee a minimum of 16 hours per week and take other measures to address the side of certainty in the in-work poverty equation.

The goals of programmes such as these are of course laudable and they no doubt contribute towards improvements on certain fronts, but they have an inherent flaw: they are voluntary schemes. What of those who choose not to sign up, or even worse, try to dodge their minimum legal requirements on pay?

Research for a piece published earlier this week by media platform openDemocracy found that during the past six years only six employers have been prosecuted for paying employees less than the minimum wage, even though tax authorities found more than 6,500 violations. Among them were firms that had been “named and shamed” last year for failing to pay minimum wage, but which then collected millions in furlough payments.

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Responding to the report, a spokesperson for HMRC said the low number of prosecutions reflected a focus on taking civil action rather than using the courts to tackle offenders. Perhaps, but even so, it’s hardly a good look when more than a million workers were cheated out of £100 million in wages between April 2015 and March 2021.

The impact of this goes beyond the individuals involved. It has been estimated that workers under financial pressure are four times more likely than others to suffer from depression and anxiety. According to financial wellbeing service Salary Finance, the working poor are six times more likely to produce substandard work.

Meanwhile, those on comfortable incomes have tended to save up their cash during lockdown, leading to widespread hopes of a release in “pent-up” demand washing across the travel, hospitality and retail sectors. Yet for those who have struggled to get by, doing without many things others take for granted, any extra money is as – if not more – likely to quickly make its way back into circulation.

All work and low pay makes Jack a poor boy, but the repercussions don’t stop there. The financial marginalisation of growing numbers of the working population bodes ill for the whole of the economy.