Thursday, June 14, 2007

Nailing relative poverty

Government strategy for tackling child poverty is penalising two-parent families, a think tank has suggested.

The study by Labour MP Frank Field for Reform says tax credits discriminate against working couples and discourage single parents from finding partners.

Nearly a quarter of children in two-parent families live in relative poverty - almost the same as when Labour came to power in 1997, he said.



There’s something rather satisfying about seeing New Labour hung on its own ‘relative poverty’ petard. Ever since that ridiculous Unicef report I have taken the trouble to give the concept of relative poverty a long hard stare, and have also read some pretty good attacks on it (such as Jamie Whyte’s ‘Bad Thoughts’ – recommended).

The Unicef debacle helped in that it came up with an obviously wrong conclusion: that children in Britain were ‘poorer’ than children in genuinely poor countries. So given that the conclusion was wrong, there must have been something wrong with the way the conclusion was reached.

Since then, it has come to my attention that New Labour came to power in 1997 promising to end child poverty, which they said affected one in four children. I don’t remember questioning this clearly absurd claim at the time, so let’s do so now, since Labour has apparently failed to reduce it.

What is ‘poverty’? To my mind, poverty is a word with a meaning. It has connotations. It conjures up an image of a level of hardship whereby such things as food, clothing and housing are difficult to come by. Children in poverty would probably be unhealthy and uneducated. They would have no access to luxuries such as all-you-can-eat Chinese buffets. Cars, holidays, mobile phones, satellite television and extensive DVD collections would be but distant dreams.

Does this sorry state describe one in four British children? It does not. So New Labour’s ‘poverty’ must mean something different to my ‘poverty’. In fact, it turns out that a household is ‘poor’ if its income is less than 60% of the national median after housing costs are deducted.

One big, fat objection should begin screaming in the face of any intelligent person at this point. If this is how you define poverty and you are in it, then the Government could lift you out of it by actually decreasing your material wealth – so long as they also decreased the wealth of everyone richer than you by a sufficiently larger amount.

But even ignoring this, using household income in isolation as a measure of real poverty is stupid, especially for Britain. This is because we live in a state with considerable welfare benefits (it would be even more stupid in France and slightly less stupid, but still stupid, in the US).

In Britain, the state will pay for a ‘poor’ child’s education, health, housing, and give allowances for food, clothing and bills.

Suppose Peter is a ‘poor’ child because his household income is only 35% of the national median, and David is non-poor because his is 70%. Would this make David twice as well off as Peter?

Peter and David could live in the same street, go to the same school, the same dentist, wear the same jeans and eat at the same MacDonald’s. Their lives would be virtually identical, except perhaps David might go on slightly nicer holidays – to Benidorm instead of Bognor, perhaps. Yet Peter is adding to the ‘poverty’ stats and David is adding to the rich stats.

An analogy would be this: suppose Jeff gets £1 a week pocket money and Martin gets £2. If we only count this income, Martin is 100% richer than Jeff. Martin is a prince and Jeff is a pauper.

But both Martin and Jeff’s parents spend £100 per week on their schooling, clothes, food, doctor, tennis lessons and haircuts. So Martin’s real spending capacity is £102 and Jeff’s is £101 – a measly 1% difference. Clearly, it is absurd to call one a prince and the other a pauper just because Martin can buy an extra can of Irn Bru every week.

But this is just the logic on which the relative poverty merchants operate.So why do it? Why use the term ‘poverty’ for one in four children instead of ‘those who live in households where income in isolation of welfare and benefits is less than 60% of the national average after housing costs are deducted’?

Because ‘poverty’ is an emotive word with the kinds of connotations of shoeless street urchins I mentioned earlier.

I am a decent human being and if you ask me if I think we should do something to help end ‘poverty’ I will say yes. But if you ask me if I think we should do something to lower the number of people whose income is less than 60% of the national median, then I’ll have to think about that one. I might ask: can’t we just keep making everybody richer?

The BBC uses the word poverty in its relative sense because it provides nice headlines (“Poverty crisis!”); leftists use it to try to prove the failures of capitalism, and New Labour used it because they were idiots.

22 comments:

David said...

Martin? Who the heck is Martin?

For an absolutely jaw-dropping example of the view Brit so thoroughly skewers, see here. There really are people who claim to think that we would be better off if everyone were poorer, so long as no one were much richer. I can only conclude that they are so attached to their favorite policies that they have to adopt new goals when their policies and goals are shown to conflict.

martpol said...

Brit:

I feel myself pulled towards your side in the argument, at least as far as the use of the word "poverty" is concerned. UNICEF should really concentrate more of their resources on malaria eradication programmes, promoting sex education and tackling child slavery. Instead, they doubtless feel it would be "patronising" to shower all their resources on genuinely poor countries, as this might imply that they think places like Britain are perfect. So some of the funds are siphoned off to highlight "relative poverty" in the Europe, when most Bangladeshi or Ugandan children would happily give their right arm to have the lifestyle that ours do.

That said, I see nothing wrong with our government tackling "relative poverty" (even if that's not what they call it), if it can help to reduce the likelihood of children's social background having a negative effect on their future prospects.

I hope I'm not Martin, by the way. I really, really hate Irn Bru.

Brit said...

'Martin' is a hypothetical, like all the other randomly-selected names.

Martpol, you offer the best excuse that either the producers or reporters of the Relative Poverty press releases can contrive: that even if the reasoning is flawed, it draws attention to a worthwhile cause.

But that's still a really rubbish excuse. Attention has been drawn not because the figures reflect a real problem, but because the figures are sensational - are amazingly high.

So the best they can hope for are panic policies based on flawed reasoning. And how does that help anybody's cause? There are enough real problems to tackle without inventing phantom ones.

martpol said...

Well, there clearly are "real problems" caused by "relative poverty" in Britain, like the continuing inability of poorer students to get into university.

If "the best they can hope for are panic policies based on flawed reasoning", then that suggests an inability to apply critical reasoning to the business of governance. Perhaps that's no surprise, in light of the BBC's own dwindling stocks of said skills.

Mike Beversluis said...

I think a working definition of poverty is whether you worry that you are not happy. Poor people don't because they are busy worrying about not dying.

Mike Beversluis said...

Happiness and the Ideological Mediation of Adaptation.

martpol said...

Mike:

I think that might be a very Western definition of poverty. When visiting Lesotho a couple of years back I can't remember talking to a single person who seemed miserable. Perhaps the distinction was that, despite having no jobs, roads, electricity or running water and surviving on subsistence farming, there was no civil war or famine.

Brit said...

Martpol - I think you might have missed Mike's point: only rich people worry about being miserable. He was being wry, you know.

Neil Forsyth said...

Income is certainly one very important determinant of poverty and not a bad place to start when trying to define it and tackle it (less than 60% of national median seems like a reasonable cut-off point). But it is not the only determinant. There is much more to it than that. Poverty also has a significant social and cultural aspect to it (as Martpol alluded to). One of the most critical points to make about poverty is that it is often generational and quite entrenched within families and communities. By way of illustration, my financial situation could take a nose-dive tomorrow and I could end up on the streets. By virtue of being homeless, I would be considered poor by most definitions. However, my poverty would be purely situational. My cores values would remain the same (some might be put to the test perhaps), my educational achievements would remain the same, my skills and experience, my employment history and ditto a range of other things that place me firmly in the category of middle class. In other words, to solve my poverty would be relatively simple: money. However, if I lacked all the other things I mentioned, it would take more than a rise in my income to help me move on. For many living in poverty, relative or otherwise, an increase in their income would be welcome. But they will remain outside the mainstream and marginalised by virtue of their social status not their income.

martpol said...

[Reads Brit's comment; rereads Mike's; slaps own forehead]

Neil:

In other words, to solve my poverty would be relatively simple: money. However, if I lacked all the other things I mentioned, it would take more than a rise in my income to help me move on.

Exactly. And while the "relatively poor" in Britain might have nothing like the same lives as the absolutely poor, relativism is useful inasmuch as "moving on" is important in a society like ours; when the general social trend is for people to define themselves by their job/status, then it's something that really does matter.

Brit said...

Income is certainly one very important determinant of poverty and not a bad place to start when trying to define it and tackle it.

That's just the point. The Government has manufactured an entirely artificial problem to tackle merely by defining 'poverty' in an arbitrary way. And even if you think 60% of median income is reasonable, it's still arbitrary.

Once you've defined poverty in this way, and found that it applies to 25% of children, there are two questions: can you reduce this number?; and should you reduce this number?

Amusingly, in ten years New Labour has found that it, at least, can't - since apparently 25% of children still fit the definition.

Whether you should try to decrease this number is a far more controversial. I would say no since it is a meaningless goal in itself. You might say yes. But the real issue is: how can you justify describing any state of having less than 60% of national income - no matter what that income level is - as 'poverty'?

David said...

We can't ignore the possibility that this artificial definition was designed to result in an insoluble crisis. After all, income is highly correlated with age and having children is highly correlated with age, so I don't see how we're going to avoid having children born to low-income parents. Because the definition is relative, even a rising tide won't help.

In other words, I expect that the natural result of the combination of factors that go into "relative" poverty is that about 25% of children are relatively poor.

Brit said...

Yes, another oddity is the specific focus on children.

David said...

And, in fact, really roughly it appears that 60% of median income is about one standard deviation below median income, meaning that you'd expect somewhere between 15-20% (as I said, this is rough) of the population to be below that line and to have more than it's proportional share of the nation's children.

Brit said...

Martpol:

relativism is useful inasmuch as "moving on" is important in a society like ours; when the general social trend is for people to define themselves by their job/status, then it's something that really does matter.

Agreed. Now how on earth do you reconcile that with your socialist outlook?

Brit said...

David:

Which would explain why New Labour has failed to deliver on its promise, thus hanging itself by the relative poverty petard because it can't even claim credit for the rising tide.

David said...

If you can earnestly say, preferably with a catch in your voice and glistening eyes, that it is "For the children," you can get people to agree to all sorts of nonsense.

Although I spoke too fast when I said the problem of relative childhood poverty is insoluble. There is one sure fire cure. If you look at that chart I linked to, you'll see that Old Labour had it licked in the 70s, when relative poverty was driven down to about 10% of the nation. Ah, those must have been halcyon days indeed.

Duck said...

Relative poverty is insoluble because it is definitional. There is always going to be a bottom 40%. The definition says nothing about material conditions. This is class/status politics pure and simple. It is poverty as a state of mind and not an economic condition.

martpol said...

Brit:

With the exception of the Arthur Scargill types, the thrust of modern socialism is not to ensure that the industrial working class is maintained at all costs. It's to ensure that those at the bottom of the pile - and Duck's point that there is always going to be a bottom 40% is true even if the gap between top and bottom were to narrow significantly - are able to access the positive things that that society produces, thus improving their own future prospects, and in turn enhancing what they can contribute to society in return.

Brit said...

You mean modern socialism is Thatcherism plus a bit of caring-sharing language. I thought that was usually called Blairism.

martpol said...

No, I mean that socialism is caring-sharing, Blairism tried to be but failed, and Thatcherism was never interested in that side of things in the first place.

Brit said...

Erm, I do think you need some sort of business about redistribution of wealth, public/private ownership etc in there to qualify for the term 'socialism'.