From The BBC
Poverty rates in Wales have fallen faster than those in England or Scotland in the past decade, according to a social policy research charity.
The Joseph Rowntree Foundation study found poverty levels are no worse than the average for Britain as a whole.
But it says one in four children, up to 170,000, still grow up in a poor family, with 250,000 households in "deep poverty".
First Minister Rhodri Morgan said the study showed "major challenges" ahead.
"This important independent research shows that we are seeing significant improvements in an individual's life chances in Wales, but there remain some major challenges which we must continue to tackle," he said.
The report compiled official figures on health, housing, education and poverty to conclude that 640,000 people in Wales were living in poverty, including 120,000 pensioners and 350,000 working-age adults.
It found that a third of homes with children living below the poverty line were in the south Wales valleys, while another third were in Cardiff and the rest of south Wales. More than half of those children live with lone parents who are mostly not working.
The parents of the youngsters in the south Wales valleys were more likely to be unemployed due to long-term ill health than anywhere else in England and Wales.
Other counties with areas of above average rates of long-term ill health were Carmarthenshire, Ceredigion, Gwynedd and Ynys Mon.
The study found unemployment had almost halved in a decade to around 60,000, with a further 95,000 people wanting to work but prevented due to sickness, disability or lone parenthood.
It said low pay, especially among women, was an increasingly significant cause of poverty, with more than a third of poor households including an adult who was working - a figure that was not lower than in the mid-1990s.
'Roots of poverty'
Report author Peter Kenway said: "Nearly four in 10 of the people who are in poverty in Wales are in households where someone is doing some paid work and this in-work poverty has not declined at all during a period when jobs growth has been fairly strong.
"In the short-term, the answer is higher pay at the bottom, and many of these low-paid jobs that are the cause of in-work poverty are in the public sector, and higher benefits.
"In the long-term, one has got to look both at the quality of jobs and also at the level of qualifications.
"In a way, for us, of the most disturbing statistics is the one that shows that, of 24-year-olds, a third do not have adequate qualifications to cope in the labour market as it is now.
"Unless something is done about that, in some sense, the roots of poverty in the future will not have been dealt with."
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