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UK - Redefining child poverty

The Don

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The Don
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The coalition government's response to the economic crisis has been a programme of real and imagined austerity where the responsibility for paying the price of austerity is increasingly being transferred from the rich (whose marginal tax rates have been reduced) to the poor (whose benefits have been reduced in both absolute and real terms).

One of the effects of this has been an increase in the levels of child poverty. Child poverty is particularly bad in Wales where child poverty rates are greater than 30%.

The government is committed to eliminating child poverty by 2020. This was going reasonably well until the financial crisis and austerty but now we're going backwards at a rate of knots. The definition of poverty being used is that family income is less than 60% of the national median which is an artificial but easy to calculate measure. Ian Duncan Smith (IDS) is proposing that the definition is changed to include whether the children have access to education and healthcare (which is pretty much a given in the UK).

Conservative supporters insist that IDS has had a "road to Damascus" epiphany and wants to expand the definition of poverty. Those on the other side of the political divide and those who work with the poor doubt that IDS has changed his spots quite so suddenly.

Personally I feel that the 60% of average earnings was a poor definition of poverty but was at least easy to calculate. Any definition based on individual circumstances is fraught with difficulty to define and calculate. I also feel that this is a political move to distract from the fact that the 2020 date is out of the window and will provide a mechanism where the poor can be stigmatised.
 
How are you ever going eliminate poverty when the definition is being in the bottom 40th percentile?

I mean, if you increased everyone's wealth in real terms by a factor of a hundred thousand million billion trillion orders of magnitiude, poverty levels would still remain the same.
 
Professor Yaffle said:
That would be true if that were the definition. Its not. Earning 60% of the median income is not the same as being in the bottom 40th percentile.
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Poor reading comprehension on my part, but my point still stands - if you define something as being greater or less than a proportion of the average, you will never be able to eliminate it.
 
Hubert Cumberdale said:
Poor reading comprehension on my part, but my point still stands - if you define something as being greater or less than a proportion of the average, you will never be able to eliminate it.
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That's nonsense. Here's an example. Lets say (figures plucked from the ether for the purposes of example) the median household income is £25,000 pa. If we defined poverty as family income of 60% of the median - £15000 pa - then it would be simple (though not necessarily politically easy) to eradicate poverty by making sure that benefit levels/tax credits top up income to above £15000 pa for every family.

And notice that the OP is talking about children living in poverty. So it would be families with children that would recieve this tax credit.
 
Hubert Cumberdale said:
Poor reading comprehension on my part, but my point still stands - if you define something as being greater or less than a proportion of the average, you will never be able to eliminate it.
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Cobblers. Look up what median means, then do some simple maths to see if you can find a way to make sure that you can have a set of numbers where none is below 60% of the median.

Hell, it's possible to have a set of numbers where none is below 99% of the median.

If, however, you mean that in the real world it wouldn't be possible to completely eradicate poverty when defining it that way, then you may have a point. Just.

The question is, how would you define poverty. If not by comparative income, then how?
 
Or against an absolute level of income, which is re-assessed every year in line with inflation.

I loath relative measures for these sorts of things, and I particularly loath the word poverty being used in a UK context, because I spend large amounts of time in the third world where poverty actually means something. If someone were to cost in the value that a free health service, free education, and a welfare state bring to members of our society annually, I'll bet that a good case could be made out for the very poorest person in the entire country being in the top 20% of the wealthiest people in the world.
 
You can get into the top 1% of world incomes with about USD35,000, global median is about USD1,300 I think, so probably everyone in the UK is in the top 5% since even with zero income the value of the NHS budget is approx GBP2,000 (USD 3,200) per person.

But what's the relevance of that? Hardly going to carry a party to power to "celebrate" it, or abolish the use of the word poverty.
 
Francesca R said:
You can get into the top 1% of world incomes with about USD35,000, global median is about USD1,300 I think, so probably everyone in the UK is in the top 5% since even with zero income the value of the NHS budget is approx GBP2,000 (USD 3,200) per person.
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Interesting. Thank you.

Francesca R said:
But what's the relevance of that?
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You can surely see that deciding that x% of our kids are living in poverty is ridiculous if they are in the top 5% of the world's income? Particularly when a large proportion of the children on the planet really are in desperate, life-threatening poverty.
 
MikeG said:
You can surely see that deciding that x% of our kids are living in poverty is ridiculous if they are in the top 5% of the world's income? Particularly when a large proportion of the children on the planet really are in desperate, life-threatening poverty.
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No. Politicians represent those who vote them into power (as they should). No government has ever made transfer payments in overseas aid even as large as the current one does and that's less than 1% of national income (and a lot of people think it is too high).

I don't think your idea of what's ridiculous has any traction.
 
MikeG said:
You can surely see that deciding that x% of our kids are living in poverty is ridiculous if they are in the top 5% of the world's income? Particularly when a large proportion of the children on the planet really are in desperate, life-threatening poverty.
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The problem with that line of argument is that the x% is useful for predicting future crime trends and the like.
 
The Don said:
The definition of poverty being used is that family income is less than 60% of the national median which is an artificial but easy to calculate measure.
. . .
Personally I feel that the 60% of average earnings was a poor definition of poverty but was at least easy to calculate.
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These are not the same thing.

I assume that median is the correct one, right?

One problem here is that if the national median goes up, which is a good thing, "poverty" gets defined up automatically.

Also, if the median were to go down, you might even end up with fewer people in poverty as a result, but not because their standard of living improved.

Why should we particularly care whether the measure is easy to calculate? That's why we pay economists and statisticians: to get us useful information, not just information that is easy to calculate. We wouldn't tell a physicist, look it's more important that your theory shouldn't have any difficult maths than that it accurately describe reality.
 
Puppycow said:
Why should we particularly care whether the measure is easy to calculate? That's why we pay economists and statisticians: to get us useful information, not just information that is easy to calculate. We wouldn't tell a physicist, look it's more important that your theory shouldn't have any difficult maths than that it accurately describe reality.
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If it's easy to calculate then at least we have a definition and we can say whether, by this definition, someone is in poverty which in turn gives a measure of whether poverty (by this measure) is getting better ow worse.

The true measure of poverty would be to analyse each family in detail to determine whether, given the specific circumstances of that family, they are living in poverty. It's not just a matter of income, after all necessary (however that is defined) expenditure is different from family to family. If I live in a relatively modern property then it's likely that my necessary expenditure on energy is lower than if I lived in a draughty old cottage. If I live in the boondocks my necessary travel expenditure is higher than if I lived in a city with all kinds of facilities on my doorstep. With a complex individualised definition of poverty, the figures will never be known because circumstances change all the time. It may not even be a matter of income vs. expenditure because having a good support network may significantly mitigate the effects of having low income.

IMO measuring poverty as having an income of x% of national median is equivalent to using BMI to determine whether someone is overweight. On closer analysis it is an inaccurate measure and not particularly well suited to the task at hand but it does at lest give a half-decent first order approximation and invites closer investigation and analysis.
 
We were taught that the word "average" is best avoided because of the ambiguity. The mean, median and mode were described as different "measures of central tendency".
 
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