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‘When poverty flies in the window, love walks out the door’: recessionary times for people experiencing poverty

Katherine Harford*

Abstract

This article presents a case study of the impact of the recession on an area of disadvantage as the economic crisis was unfolding in Ireland during 2009. Little attention has been given to the impact of the economic recession and subsequent policy responses on communities which have had long standing experiences of inequality and disadvantage. While it might be assumed that the recession would have potentially little further impact on a disadvantaged community, the research findings in this article demonstrate otherwise. They highlight the impact of the loss of the limited growth in job opportunities during the economic boom, together with emerging effect of retrenchment policies on the cost of living and indebtedness, and on the overall quality of family and community life. The article ends by reflecting on some of the long terms consequences of retrenchment for such communities.  

IntroductionToC

Mainstream political and media coverage of the recession has been concerned, in the main, with broad political and economic questions, and with the consequences of the recession on enterprise and the newer middle classes created during the boom of the last fifteen years. Little attention, however, has been paid to the impact of the current economic crisis on already disadvantaged communities and the people living in them. This is unsurprising, given some comments by people living in such areas, that this recession ‘doesn't effect me’ and ‘I know the social welfare system’ and ‘I have always lived in poverty’. In other words, the status quo prevails; people experiencing poverty neither benefited from boom, but nor are they perceived to be effected by bust.

This ambivalent stance would seem to be re-affirmed by some 2009 local election results, including an Electoral District (ED) which incorporates an area of disadvantage where there was no change in the voting patterns between 2004 and 2009 (Took and Donnelly, 2004; 2009). This exception to the national trend received little attention but again would tend to a possible conclusion that this recession is having little impact (that is, not enough for a protest vote) on people experiencing disadvantage and poverty. Elsewhere these same elections were used as tool by the electorate to punish the government parties for their handling of the current economic crisis.

Political messages including statements from the Department of Finance would suggest that social welfare rates are generous in Ireland (Carey, 2009), particularly so, in light of the perceived decline in the cost of living. This assumption is so dominant it was used by Report of the Special Group on Public Service Numbers and Expenditure Programmes (the McCarthy report) to recommend a social welfare reduction of 5 per cent. This cut, the report suggests, would ‘effectively preserve living standards for affected groups’ (McCarthy, 2009: 186). In August 2009 The Poor Can’t Pay campaign group called on the Minister for Social and Family Affairs, to make public her department’s analysis of the impact of planned welfare cuts. The debate on welfare payments, they argue, has been ‘dominated by people who know very little about the welfare system or about what it is like to live on a low income’ (The Poor Can't Pay, 2009). In the event, Budget 2010 subsequently cut social welfare (by 4.1 per cent) for all working age adults, despite arguments put forward for the need to preserve social welfare rates.

Researching the impact of the recession on people in an area of disadvantageToC

The primary research upon which this article is based was carried out by conducting three focus groups with participants who may experience multiple disadvantages by virtue of where they live and are at risk of poverty as a result. The people involved in the research were able to articulate the ways the recession is in fact affecting them. The research also incorporated dialogue with practitioners within the community and voluntary (C&V) sector working in the area, which presented them an opportunity to reflect on changes as a result of the recession for people they work with. As a community practitioner managing a local development project, I was able to capture the essence of change in the community as it was happening, due to my everyday contact with local people, local workers and by observing how policy changes were shaping out at the local level. The article is therefore a small case study from the periphery of the current debate, one which voices the reality of unemployment, the cost of living, indebtedness, and family and community life during recessionary times. As a result it has as much to say about the equality and inclusion of such communities of disadvantage and the social, emotional and health implications during such times, as it does about household income or lack of it.

The people at the centre of this study live in an urban centre within the remit of the Revitalising Areas by Planning Investment and Development (RAPID) programme. It has a population of over 8,000 people and was marked by the 2006 Census as ‘extremely disadvantaged’. Within the community those in the highest social class comprise 8.3 per cent with 43.4 per cent in the lowest socio-economic group. There are a high number of single parent households and unemployment stand at almost 30 per cent amongst the male population. The area has a high concentration of local authority housing at over 60 per cent of all households (Hasse, 2008). While all communities have different characteristics, the area at the centre of this research, reflects many of the factors which make many an urban community in Ireland ‘disadvantaged.’ Like other similar areas, it has been the recipient of inward investment and development through an extensive regeneration programme with considerable capital funding for improved housing, community buildings, and for the physical environment which is currently taking place. Traditionally because of the nature of the area, there is in part a very settled community of people, but it also includes those who are moving into the area and others moving out into more prosperous areas as their personal circumstances have improved.

Research findingsToC

This section of the article outlines the main findings arising from the research and demonstrates the high level of concern and sensitivity to the crisis and its potential impact on individuals’ lives and that of their local community. The most striking initial comments from people was how powerless and out of the loop they felt in current debates about the recession in the media, particularly when referring to the banking crisis, NAMA, the McCarthy report etc. Some felt angry with the government: ‘they don’t know what it’s like for us and they don’t take any of the burden’ and were not satisfied with the leadership demonstrated, saying, ‘they are doing nothing to show a good example’. One person also commented that they were ‘in fear’ of what is happening, both on a national scale and in terms of its possible impact on their lives.

Unemployment

Training and education to improve job opportunities have provided real options for people living in a disadvantaged area to become more competitive in the employment market. People in the area have been taking part in adult education, FÁS Community Employment (CE) and Jobs Initiative programmes since the 1990s. Recently however this has not been leading to job opportunities as was previously expected and instead people are returning to social welfare. For instance, as one person explained, ‘I learned all about food safety, cooking, and I had chemical training and I got work experience, it’s a waste, it’s frustrating all I learned and the bit of extra money and now I am back claiming.’ Such experiences have a significant impact on the feeling of self-worth, self-esteem, confidence and willingness to participate in society. Furthermore training and education opportunities are still being provided for people through the local college for example, but these remain geared toward areas of work which are no longer needing human resources such as childcare and manufacturing. ‘Training available for people in this area is not what is needed for the types of jobs available’ as another person commented (see also Maxwell and Dorrity, this issue).

Everyone was asked whether someone in their house/family had recently become unemployed. Reflecting on areas where people were losing jobs they were mainly described as construction, computer manufacturing, food processing, shops and childcare. In addition, Summer work was not found to be available and ‘top ups’, ‘foxers’ and ‘nixers’ – referring to cash in hand work - ‘that’s not even there’. In previous years women described taking on extra work on ice-cream vans or as cleaners. For men it was felt there was even less hope of picking up something and many households have men in their 40s, 50s and 60s at home with no work at all. It would be interesting to see a census collection of data taken in 2010 to compare the Small Area Population Statistics with those found in the 2006 Census. What we do know from the CSO Quarterly Household Survey as Michael Taft (2009) Economic Advisor to Unite explains, nationally, ‘it is the lower-paid manual occupations that are taking the worst hit’.

In an area such as where this study was carried out, the concentration of manual occupations is high and therefore the ‘hit’ is acutely felt. This point is further evidenced by local employment services and information providers who have experienced an increase in people seeking information on redundancy payments, short time work and temporary lay off. Another observation they made was that those seeking support are qualified trades people and have been in construction work for example, since they were 16-17 years of age and who now say they are ‘cracking up’ without any work. Unemployment, it is agreed, plays a central role of an increased risk of poverty and that ‘high unemployment rates...bear witness to the wider socio-economic problems’ (Edwards and Linehan, 2005: 50). In an area with consistently high unemployment rates, it is difficult to see how the area and the families living within it, will manage with the increasing unemployment and the risk and instances of poverty that will emerge.

Cost of living

For the Vincentian Partnership for Social Justice (2008: 7) the increase in pensions, social welfare transfers, along with the rise in the national minimum wage and the introduction of the early childcare supplement meant that the number of households for whom it was possible to afford a minimum standard of living ‘demonstrate that social welfare transfers, when sufficient and properly targeted, can and do bring people out of poverty’ (see also Fahey and Hennessy, this issue). Furthermore people on low incomes are largely skilled managers of their small budget by prioritising household payments on a daily, weekly or fortnightly basis. However, ‘utility charges impose a major burden on low income households as they consume a higher share of their total income than for other groups’ (CPA, 2003: 10) and present a significant risk of indebtness (ibid.). According to the participants in the research for this article, only those with cars could ‘shop around’ and so most did not experience deflation in consumer goods. As one person explained, ‘food shops in this area have not reduced prices, our bills going up, I know people who are now cancelling insurance policies.’

The price adjustments that McCarthy (2009) leans on as an argument to reduce social welfare rates are taken from the Consumer Price Index (CPI) which itself looks at the average level of prices paid for consumer goods and services by private households and by foreign tourists holidaying in Ireland (CSO, 2009). Recalling that the highest poverty concentration can be identified by housing status (Burke, 2009) which in the area of this study has over 60 per cent residing in Local Authority housing, the CPI becomes a less than accurate measure of the cost of living for many and erodes the gains that the Vincentian Partnership for Social Justice (2008) points to. This point has also been borne out with reference to recent cost of living figures, which show that after mortgage interest is removed from the calculation, the decline in consumer prices was actually 2.2 per cent for 2009 (Loftus, 2010). Cuts in social welfare rates imposed for 2010 are ahead of this figure (4.1 per cent), and this does not include the removal of the Christmas payment in December 2009. For most people in this study they can no longer afford any social outlet for themselves or their children. What would be regarded as normal leisurely pursuits such as sports clubs and camps, going to the cinema and more are now inaccessible.

Indebtedness, credit and lending practices

Indebtedness is being felt on both sides of the problem, hard of course for families, but also for those trying to offer assistance. One information service provider reflected that

Sometimes you have to tell people things they don’t want to hear so you are helping people come to terms with the reality of their situation and the consequences of their decisions, like when they can’t afford to pay for the car they might say ‘I don’t care let them take it’, well what about getting to work, kids to school stuff like that, isn’t it worth looking at options for keeping the car, it will have an even bigger impact on your life without it.

One parent families appear to be most at risk of indebtedness. At the time of the research those on the one parent family payment receive a means tested payment of €204.30 per week and an extra €26 for each dependent child (Department of Social and Family Affairs, 2009). These payments have subsequently been adjusted to €196 and €29.80 respectively in the 2010 Budget. The one parent families who took part in this study feel that they receive little more than a single person rate yet are paying out directly on loans, rent, bills, and children. The latter expense far exceeds the additional payment accounted for. Back to school and Christmas are particularly demanding times financially. The parents who participated in this study during the summer of 2009 were already literally in a state of anxiety over Christmas and how they would manage the upcoming expenses. The Christmas payment had been paid since 1980 and for nine years was set at 100 per cent of payment rate to people on long term welfare payments. The Christmas payment was not paid in 2009 and five months before Christmas, it was already seen as a huge loss; ‘I need that money’. Rather than being considered a bonus, it is considered a necessity and its withdrawal was expected to force families further to seek expensive borrowing opportunities.

Annual large expenses aside, on a weekly basis one parent said ‘I get paid on Thursday after I’ve paid everything, I am looking where they can get money from on Friday because I’ve run out after paying all the bills’. Parents described feelings of depression, anxiety, and putting themselves last and sharing the financial and emotional pressure with other members of family – namely grandmothers. One parent mentioned, ‘my mum takes the kids to give me a break, coz I get depressed...I am 29 I shouldn’t feel like this.’

Ireland already measures as having the one of the highest instances of financial exclusion in Europe (CPA, 2008). Most if not all participants in this research, whether in receipt of social welfare or working, were in debt and paying off loans. Viewed as a significant financial support in low income communities, people here reflected that ‘credit unions are just like banks’ in their practices. Some referred to the Credit Unions using similar criteria for lending as banks and others referred to the absence of support and flexibility when encountering difficulty making repayments. The risk of financial exclusion can exacerbate experiences of poverty (ibid.). The government has recognised this and provided additional resources to Money Advice and Budgeting Services but this action does little to ease financial stress and the consequential pressures on everyday life in the recession. People are forced to go to alternative money lenders despite their higher costs of lending, and to other family members for financial support, who in turn also have no elasticity in their own budget. As one person put it: ‘My daughter and her partner are both out of work, I have to help them and get my own few messages, I’ll leave myself short, I have to!’

Family and community life

In one of the focus groups with local people, when asked about the effect of unemployment, credit, and indebtedness a discussion ensued around the saying ‘when poverty flies in the window, love walks out the door’. Pressed further the group explained that the saying refers to the pressure now being felt on household relationships. ’One person out of work effects the whole family – everyone knows someone effected’. Another commented that, ‘everyone is upset, it goes around the whole family’. With no work and unable to afford a social life, stress at home intensifies and people are denied an outlet: ‘it is not natural’ as one person put it.

In addition, family members including grandmothers, partners and mothers are putting their needs, health, financial and otherwise, low in their priorities, where even the fear of poverty is leading to anxiety. Children are also becoming aware of changes, which is upsetting for adults. ‘Have you got enough Nanna’ is how one participant described an experience with her grandson when she offered him an ice-cream. The primary focus of concern appears however to be for young people and families because of a view that the younger generation are unable to cope in dramatically changing employment, financial and family circumstances. Older generations feel guilty that they gave everything to their children that they didn’t have themselves. These feelings of worry were evident in comments such as, ‘I’ve been through it, but the younger generation haven’t, and won’t be able to cope with it at all’ and ‘this generation never knew poverty or anything like that...they’re not like us’. Their perceptions of the strains that are experienced within their community is particularly salient, ‘I see it in the young ones...I see it in the stress on their faces, that’s a worry for me.’

While it is very difficult to obtain locally relevant statistics, it is commonly observed that the community within which this research was conducted, is faced with a particularly acute problem of drug use, high incidence of suicides, tragic deaths, illness, depression and other mental health problems. The parish office informed this research that in the first six months of 2009 there were more deaths of local people aged 30 and under, than in the previous two years altogether. It is not being suggested that the recession is the cause; the problems recounted are a reminder of the already difficult community life that people are dealing with. However, many felt the recession will add to the already volatile and difficult situation, with one person remarking that ‘robbing and all that is going to come back’.

Inequality

Health outcomes are influenced by the social conditions in which people live. ‘Stress or isolation for instance is often linked to the impact of poverty, financial strain, social exclusion, discrimination or inequality’ (Farrell et al, 2008: 17). As a result it is well known that poorer people experience poorer health. As with any equity investment, health equity is an ‘investment in human, societal and economic development’ (ibid.: 19). However local practitioners have observed cuts in funding for the C&V sector as well as in the delivery of services in the areas of health, welfare and education, where they are needed the most and when special policy efforts are required to meet the needs of the most disadvantaged (Burke, 2009). With noticeable cutbacks, many of the government’s own strategies appear untenable including the current social inclusion strategy, the National Action Plan for Social Inclusion 2007-2016, which has quietly fallen under the political radar of recent times (see also Martin, this issue). Its overall aim was to ‘build viable and sustainable communities, improving the lives of people living in disadvantaged areas and building social capital’ (Government of Ireland, 2007: 60). This and other strategies were intended as medium to long term programme of work to redress inequality and improve public services, and should transcend any political or economic changes. Rather than being protected and offered consistency in times of change, the areas they were intended to target are left to compete with all of the other policy issues and areas affected by the current crisis.

An initial reaction to this article may be to assume that families and communities right across society are experiencing the same consequences of recession described here. Furthermore, it could be argued that instances of unemployment, family breakdown and community dysfunctionality were all taking place before the economic decline of the past year and so the current economic crisis has little to do with the conditions that people living in a disadvantaged community find themselves in. However any analysis of welfare or social service cuts should also take into consideration non-monetary factors such as poor mental and physical health and the obstacles to educational attainment experienced by poorer people in society. Reminders of the traditional inequality that prevail were evident in this research. For example, the stigma associated with postal addresses, which, for one person meant, ‘I still have to put my uncle’s address down handing in my C.V. for a job, coz he doesn’t live here’. An address like other social status markers ‘attracts class prejudice – which leads to worse health and to wider income differences.’ (Wilkinson and Pickett, 2006: 1779)

The way in which poorer people, particularly those who experience multiple and complex disadvantage, are treated during recessionary times will determine a pattern that will continue post-recession, because there has been no investment of will, commitment or resources in a social structure in the times when it is needed the most. In highlighting the need for continued resources in the health budget for primary and social services, Burke (2009: 317) explains that ‘it allows for the most basis aspect of human life to life to be fulfilled...these services cannot and should not be cut no matter what the current economic circumstances’.

Wilkinson and Pickett (2009) make the case in their book Spirit Level that it is not average income which counts, but the difference in income levels between the richest and the poorest in society which determines inequality. Along with other vulnerable groups of people, those living in areas of disadvantage will struggle the most to climb out of the recession given all the determinant factors which increase inequality at this juncture.

ConclusionToC

The impact of the recession is being felt in a way which reflects the boom to bust analogy in that a sudden change in people’s everyday lives is being felt in the last year and the impact of future cutbacks are already feared. It is quite evident from this case study that individuals and families living in disadvantaged areas are experiencing the impact of the recession. The limited economic, employment and educational opportunities that were realised are being turned back, with a reduction in household income, and social/community and individual supports. This in turn is having a significant impact on family life, on health, and on community life in an area of multiple disadvantage. The fact that the current policy priority is one of retrenchment and the wider debate is not focusing on the impact of these decisions, suggests the prospect of deepening inequality. This is of most concern as it will ensure a longer struggle for people living in communities of disadvantage to emerge out of the recession.

This article is the result of a modest piece of primary research undertaken as the crisis was still unfolding but it highlights the need for further analysis of the crisis and future recovery to be discussed within a social inclusion and equality framework lest we repeat the limited success and significant failures of market driven policy of the preceding years. However given the dissolution of the Combat Poverty Agency and other independent bodies, critical analysis will be difficult to resource and potentially less influential in the national policy arena. It is unfortunate but not surprising therefore that people from disadvantaged communities have been at the periphery of the economic, political and social debate about the recession. The opportunity has been offered here to people experiencing poverty to respond to and voice their opinion on their circumstances during recessionary times. This is an opportunity which has been articulately grasped and in fact demonstrates the ability of such groups of people to have a say in future social policy and economic recovery that will benefit all.

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