The 2010 Child Poverty Act defines a child as being in absolute poverty if "the household’s equivalised income is below 60% of the 2010---11 median income, adjusted for inflation", while fixing the use of 2010/11 as a comparison year. Lee, the Roving Bandit, comes down pretty hard on this definition:
So by "absolute poverty" we are still actually talking about inequality. Now, I care very deeply about inequality, and in particular inequality in life chances (i.e. starting points rather than outcomes).
But I just can't decide whether I should be irritated by imprecise and misleading language about poverty, or impressed by the re-branding of inequality (which is clearly something only loony socialists should care about) as child poverty (who wouldn't care about child poverty? Surely only a heartless monster. Even Conservatives should care about child poverty).
So points for clever marketing. But do we really want people to think for a second that the absolute poverty of living on £23.50 a day in the UK is in any way comparable to the absolute poverty of the billion or so people worldwide who live on less than 80 pence a day?Lee has two arguments here: the first is that the measure of `absolute poverty' described in the 2010 Child Poverty Act is actually a measure of inequality, as it is based on a percentage of total income. His second argument is that the UK's conception of absolute poverty is to sensitive - that the people living below 60% of 2010/11 median income.
The first problem with this argument is that the international measure of absolute poverty, i.e living on less than $1.25 (PPP) dollars a day, is not really an absolute measure. Consider this thought experiment: if we had first developed the international policy line 100 years ago or 100 years in the future, would it be the same as it was today? I doubt so - our perceptions of what poverty is change over time, and these perceptions are inherently relative to our own position. This means that even `absolute' measures are, in some way, a measurement of inequality, just ones we've committed to for some unspecified period of time.
We fool ourselves into thinking these are absolute measures for a while because they are fixed over time. This is what we did with the $1 a day measure, which was subsequently revised up (!) to $1.25 a few years ago. This is exactly what the Child Poverty Act has done - it has picked a measure of poverty based on a time-invariant threshold. Sure, the basis for that threshold is very sensitive to inequality, but as I've already explained, there's no such thing as an objective, absolute conception of poverty. We will all be poor in the eyes of our descendants.
Is the threshold set by the CPA too high? Are households earning under £23.50 a day really poor? It's not for me to say, but I see nothing wrong with individual countries coming up with their own definitions of poverty. If we are encouraging developing countries to outline their own definitions and policy priorities, why shouldn't the UK? International development experts don't have copyright over the term, nor should they.
Yes, the relative poverty measure is very closely linked to inequality, but so are a lot of different types of absolute poverty measures. The lines seem a bit too blurred here to get upset over them.
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Not quite - we can and do come up with absolute poverty lines based on objective criteria such as the cost of purchasing enough calories to not starve.
True - but the "extreme poverty" measure, the $1.25 dollars a day measure, is not one of them - it's actually incredibly subjective. Its basis, the original dollar a day measure, was derived by Ravallion looking at the poverty lines of a group of low-income countries and noting that they tended to cluster around this amount. nnEven when you come up with strict definitions, like whether or not you are earning enough to buy a set amount of calories - our perceptions on what a reasonable basket are still not completely defined - it's never set at actual starvation level (actual poverty would be zero if this would be the case....) and anything in between can still be subject to some sort of objection. nnNor is it clear that when you stick to a completely objective criteria are you completing getting at what poverty really is about. This isn't an argument that we should be piling on the criteria, but that poverty really is a pretty lose concept, so I see little problem with legislation applying it as loosely as pretty much every institution under the sun does.
"do we really want people to think for a second that the absolute poverty of living on £23.50 a day in the UK is in any way comparable to the absolute poverty of the billion or so people worldwide who live on less than 80 pence a day?"
This is probably Lee's biggest bugbear here, and he has a point. These are completely different things, and I do probably care more about poverty in developing countries, but we have to recognise that it's a significant issue in the West as well - it has real social consequence. If calling it absolute poverty focuses us more clearly on it, that might be acceptable as you point iout.
Interesting discussion. To my mind, perhaps the main point is that even if calorie intake measures are also open to some measure of subjectivity, such a measure for the West would probably provide quite a different (and lower?) poverty line than the relative-income-related 23.50 - we're not really comparing like with like. Actually, coming up with such a calorie measure for the UK could be quite an interesting political exercise given the choices open to people in satisfying their calorific intake which are presumably considerably wider than in SSA... Would we focus on how "best" to get your calories for the lowest price, or how people "actually" get their calories. In any case, I kind of agree with Lee that this UK measure is very different to what we deal with in development.
Hi Bruce, nnLee and I don't disagree over your last point, that the measures are quite different. Where we differ is that I see no problem with that. Nor would I have a problem with Brazil having a different measure of absolute poverty than India, etc.
I think Lee's point that Ranil picks up on about this being about 'marketing' in order to focus attention on the issue in the West too is important. But I'm intrigued to see if it works. My initial reaction is that people might perceive it as false marketing, because they will have conceptions of absolute poverty that are closer to what Lee is talking about. But I could be wrong - Matt's point that it's a loose concept is right, and I don't know what are the most common interpretations among the general UK public.
I think the confusion is over the term `absolute poverty', which most of you are connecting with `extreme poverty'. All the `absolute' in absolute poverty means is that we're dealing with a poverty line which is fixed . This has been the case ever since Seebohm Rowntree's work on absolute poverty lines in the UK, back at the turn of the (last) century! nnIf they called it extreme poverty, that would be completely misleading, but absolute poverty *does not mean* extreme destitution by default.
There are poor people around the world there will be so but we can eradicate poverty by following a simple solution. If rich people gives charity in proper way, poverty will decrease in great percentage. I think people should give their full charity amount to a limited number of people. May be 2-3 depending upon the amount of his charity. If they do so, that poor person will get a good amount of money from which he or she may be able to start doing something for his living. May be a small business etc. That person will not remain poor. This is my opinion. I may be wrong. Thank you.
I have watched graphs on poverty and it really depends on what the person composing the graph is trying to convey. Are there many people in terrible poverty-yes! But by comparison in reasonably civilized countries, the poorest are rich compared to some of the 3rd world countries. In this way, poverty is relative.
Nicely argued Matt,
Three other points of possible interest:
1. At least back home in NZ the 60% figure wasn't pulled out of thin air. A collaborative effort between social policy researchers and an NGO that researched the expenditure and life experiences of poor New Zealanders provided some pretty good evidence that somewhere around 60% of median income was where people started to experience material deprivation of such nature that led to material hardship and precluded people from reasonable participation in community life.
2. 60% of median income is not, strictly, a measure of societal inequality (in the way that 60% of mean income would be), it's a measure of the distribution of income across the poorer half of society.
3. IMHO, the main problem with relative poverty lines is that they don't give credit to broad based improvement over time (i.e. distribution neutral economic growth) which renders them of limited use for time series comparisons. They are still very useful otherwise though.
cheers
Terence