The man who painted my house two summers ago is out of a job. The company that has employed him for the last 10 years has sacked almost all its staff, because the work just isn't there. Joseph has had no income for eight weeks. For the first time in his life, he tried to claim a benefit – jobseekers' allowance – but he wasn't entitled to it because, for all but the last 10 months, his firm had defined him as self-employed. Ten months isn't enough to build an independent tax and national insurance contributions record, even though he has been a taxpayer for 27 years. He's been told he can't have income-based benefit either, because his wife, who is a cleaner, earns about £8,000 a year.

The couple live in a rented flat with their 20-year-old student son. The son, hardworking and ambitious, lives at home and spends four hours a day travelling to university because his family were too frightened to take on the extra debt of a student loan.

The parents have never had the money to put down a deposit on a London home, so they have missed out on the housing boom. Nor have they ever felt settled. They have had to move three times in five years because the landlord wanted to sell his property, or because he suddenly raised the rent. Now they don't know whether they will be evicted, or whether the housing benefit they applied for two months ago will meet the £200 weekly rent. Even if it does, the future looks frightening.

Joseph used to earn £350 in a good week, or £10 an hour, but the rates advertised in the local jobcentre for painting work are for between £6 and £7. And no one's offered him any of the jobs.

The family had more than £3,000 in savings, but that is almost gone. Joseph's wife has always worked, but some of her cleaning jobs have been cut, and the competition for new ones, with employers offering illegally low wages, is intense. The family has gone from just managing to cope to facing real daily anxiety and constraint.

The plight of families like Joseph's isn't a dramatic one. It doesn't attract much notice because it's not about extremes – dire poverty, drugs, or crime. For that reason it's easy for policymakers to pay less attention to people like these. But 30% of the population – some 14.3 million adults – are in a similar position to Joseph; living in households earning less than the median income but above the level for state support. A report out today argues that these low earners are particularly vulnerable to the effects of the recession, and that they need more help than they get.

The Resolution Foundation was set up to campaign for this segment of Britain. It says that low earners are being squeezed by the mixed economy; too well-off to depend on state benefits; too poor to cushion themselves when things go wrong. Almost half these households have less than a month's salary in savings. One-third say they would like to save £10 a month, but can't afford it. Eleven million already had financial problems before the recession began. They struggle to get on the housing ladder, but don't qualify for social housing, so many are pushed into the insecure private rented sector. They tend to have low skills, and to work in areas which have been particularly hard hit this year: retail, hospitality and construction. When they lose their jobs, their lack of particular skills makes then less desirable to employers. A quarter of low earners are still unemployed after six months, compared with only a tenth of managers and the higher-skilled.

Clive Cowdery, the City financier who created the Resolution Foundation with £20m of his own money, is a passionate advocate for this group. These people are, he says, active, courageous, and determined to make something of their lives. That's why they haven't surrendered to a life on benefits.

Many are holding down one-and-a-half jobs, and yet their incomes still don't match their outgoings. For them, he says, the recession is like a bomb going off, with the full impact yet to come.

Government cuts designed to deliver savings while protecting the poor – like Gordon Brown's plans to end childcare vouchers or George Osborne's proposal to chip back at child trust funds – will hit low earners hardest. They already live at the edge of their means, with almost two-fifths always or usually running out of money at the end of every month. Inflation for this group, who have to spend much of their income on food or fuel, is running much higher than for the better-off.

And previous experience shows that unemployment for this group will lag behind the end of the recession by a year, as failing companies are finally closed down by the banks. Just as the better-off are celebrating, hundreds of thousands of low earners will be losing their jobs – and often their homes.

The Resolution Foundation wants to ensure lives aren't casually wrecked. More can be done. The credit squeeze is raising the price of loans; they should not be held artificially high. A money guidance service would give advice before debts became unmanageable, and lenders should be required to evaluate individuals' prospects before automatically calling in mortgages and borrowing. Individuals ought to be given budgets for training, to choose for themselves how to improve their skills, and employers should be advised on how to cut employees' hours rather than jobs.

Tax breaks could create a solid and dependable private rented sector. Benefits must be paid faster. All welfare-to-work schemes should offer real training, linked to genuine jobs. Cowdery is no sentimentalist. People will lose jobs and have to repay debts. All he's asking is for low earners to be given more control over their lives and a greater chance of recovering from a crisis. Governments make policy by listening to the vocal, he says – the financial industry, the poverty lobby, the Daily Mail. The missing third of the population must be heard too.