Fifteen years without pay rise for families with stay-at-home mothers

EARNINGS of families with stay-athome mothers have stagnated for 15 years after successive governments focused on helping those with two parents who work, says a study.

The report from the Institute for Fiscal Studies found that typical families in which a parent stays at home to look after the children have lost out heavily.

The IFS found that the incomes of families with two working parents are 10 per cent higher than in 2002-03. The incomes of one-earner families have not changed.

Campaigners for stay at home mothers said the figures were a “disgrace” and showed how successive governments had ignored them.

The research said households with just one male earner had not benefited from relatively large increases in women’s earnings since the mid-1990s. More than eight out of 10 one-earner families had a stay at home mother, the IFS study funded by the Joseph Rowntree Foundation said.

Over the past 20 years, growth in working fathers’ pay had been “extremely slow”, at 0.3 per cent a year, while mothers’ earnings increased by more than 2 per cent a year.

The IFS said: “As a result, it has become increasingly difficult for families where only the father is working to keep up with other families.

“This matters [because] around a quarter of children live in a one-earner couple family – around the same proportion as 20 years ago.”

Parents in one-earner couples were also more likely to say they cannot afford important clothes for their children, such as a warm coat.

The research took into account the impact of inflation as well as calculating incomes from any benefits and wages after tax. The IFS said fathers in one-earner couples were less likely to be in well-paid professional or managerial jobs and were increasingly likely to be born abroad.

Andrew Hood, a senior research economist at IFS, said: “Boosting the incomes of large numbers of families dependent on fathers’ earnings may well be challenging.

“The vast majority of the fathers are already working full time, most of the mothers are not actively seeking paid work, and increases in in-work benefits targeted at the group would be likely to further weaken the financial incentive for those families to become dual earners.

“But increasingly it is a challenge that governments wanting to improve the living standards of low-income children should be considering.”

Marie Peacock, who chairs the Mothers At Home Matter campaign group, blamed a series of tax measures that have benefited two earner families. She said: “This is no surprise – it is an absolute puzzle why the Conservative Government in particular does not want to support the family and to support children.”

The decision by Chancellor Philip Hammond and his predecessor George Osborne to focus on lifting the tax free threshold to above £10,000 had a “detrimental effect on the single earner family,” she said. “Families with two incomes benefited from having two nontaxable allowances and keep more earned income”.

The Marriage Tax allowance was introduced by David Cameron in 2015 and only benefits married couples.

A HM Treasury spokesman said: “We want to build an economy that works for everyone. Income inequality is now at its lowest level since the mideighties and our reforms to the tax system mean hard working people are keeping more of what they earn.”