British families took bigger hit to income during Covid pandemic than Europeans
I found this article particularly interesting to consider through the lens of the fact that it costs more to live in rural England due to distance from services. It tells us:
The greater exposure of British households, revealed in an analysis by the Resolution Foundation thinktank to be published in full this week, comes despite similar levels of average income with our European neighbours.
The typical working-age income level in the UK is £29,437 and £29,350 in France. However, the poorest fifth of working-age households in the UK are 20% poorer than their French counterparts, while the richest fifth are 17% richer in Britain.
The structure of Britain’s economy and income inequality is seen by some as a reason for the heavy toll the pandemic had wrought on the UK. Some public health officials continue to warn that incidences of the virus remain higher in areas with many people in low-paid work and where they cannot work from home. There have been warnings that it could become a “disease of the poor” in some areas.
High employment levels in the UK helped household finances in the run-up to the pandemic last year, with a 75% employment rate – broadly similar to that in Germany and far higher than the 66% record in France. However, the typical hourly rate paid in the UK (£11.20) was much lower than in Germany (£12.33) and France (£13.89). It was partly driven by low self-employed earnings, raising further concerns about the extent of the gig economy in Britain.
Levels of UK welfare support were found to be poor in comparison with other large European nations, underlining the importance of protecting jobs through the government’s emergency furlough scheme rolled out last year. For example, a single adult who had been out of work for two months, having previously earned two-thirds of the average wage, would see their benefit income total just 17% of their previous earnings. The same person would see a benefit replacement rate of 59% in Germany and 64% in France. The gap is closed when housing-related benefits are included, with the UK’s benefit replacement rate rising to 46%, compared with 59% in Germany and 68% in France.