A new Trades Union Congress (TUC) analysis published today (24 June) of the impact of real wage losses and benefit changes on family income shows that an extra 180,000 children with at least one parent working in the public sector will end up in poverty due to government policies by 2015.
According to the analysis, families where one parent works in the public sector and another works in the private sector see the biggest losses from government policies. Their average household income will be down around £100 a week in real terms by 2015 after taking account of the current public sector pay freeze and the combined impact of tax, tax credit and benefit changes (including Universal Credit).
They are closely followed by families with parents who only work in the public sector who will lose on average £91 a week. Households with only private sector employees will lose out on average by £44 a week, says the TUC.
These figures, drawn from a model constructed for the TUC by Howard Reed of Landman Economics, combine the impact of:
* government tax and benefit changes compared to the system inherited from the previous government
* private sector wage changes (using Office for Budget Responsibility forecasts) combined with the government's public sector pay policy.
The research shows that 30 per cent of working families in the UK have at least one family member working in the public sector, with nearly half of all households (over 2.7 million) where someone in the public sector is employed also having a private sector worker.
Of the 180,000 children with at least one parent working in the public sector who will be pushed into poverty by 2015, two in five live in two-earner households where one parent works in the private sector.
TUC General Secretary Frances O'Grady said: 'Ministers like to play divide and rule by trying to pit private sector workers against allegedly well-paid public sector workers.
'But these figures tell a very different story - 180,000 children with at least one parent who works in the public sector will fall below the poverty line thanks to government policies.
"And with almost one in three working families having at least one parent who works in the public sector, you would think that ministers would be more conscious of trying to win their votes, rather than punishing them with years of pay freezes and real terms pay cuts.
"The truth is that there are low and middle income workers in all parts of the economy and they are all are having a really tough time. But unless ordinary people have money in their pockets and the confidence to spend, the UK will never get the sustainable growth we need. That's why Britain – both public and private sector – needs a pay rise."