Differing perceptions of poverty
by Claudia Wood
Today Iain Duncan Smith gave a speech calling for a more multi-dimensional measure of poverty, reflecting on the fact that the fall in child poverty this year has mainly been down to the fact that the country's median income has fallen. This, he said, demonstrated the fatal weakness in relative poverty measures – they do not assess a person's material situation, rather, their income compared to everyone else. To say someone is in poverty because they receive less than 60 per cent of the country's median income is, undoubtedly, rather arbitrary.
To illustrate the point further, he spoke of families with drug addition problems, who, given an extra pound, might be technically lifted above the poverty line but whose children would be no better off – worse off, perhaps, as the parents' addiction is being fed further.
The speech, marking two weeks before the end of the Government's consultation on a new multi-dimensional measure, thronged with phrases which sounded like basic common sense. They all pointed to an undeniable truth – that poverty isn't just how much money you have, it's how much you have to spend. Those with higher costs of living, drug addicts being somewhat of an extreme example, experience greater poverty than others on the same income.
And at this point we have to consider a hugely important question. When we talk of tackling poverty, do we mean helping all people on low income, or just those people on low income who are suffering as a result? The choice the government makes, when it decides on its new poverty measure, will be both a principled and practical one and have life changing implications.
Before Demos worked on the Poverty in Perspective project, a multi-dimensional analysis of those living below the poverty line, I would have chosen the former – because to me, the two are the same. Low income meant deprivation per se.
But this just isn't the case. Our findings, which created five 'types' of child poverty, found that the most prevalent type (covering 30 per cent of those on low income) displayed no other indicators related to hardship. They didn't have poor health, poor housing, poor education, or report any material deprivation. They weren't behind on their bills. They were, in the most part, either recently redundant or had long work histories in low paid jobs. The group's previously high income protected them from the deprivation associated with long term poverty, while the latter had honed their budgeting skills so effectively over years of low pay that they were managing to make ends meet.
And this is where the tough decisions arise. A poverty measure designed to alleviate poverty, in this economic environment, must prioritise those in poverty and suffering hardship as a result. It's entirely possible that those who are not suffering now may suffer in the future, if they experience a financial shock (e.g. boiler breakdown) or prolonged low income. Not all of the recently redundant will bounce back into work. But when prioritising resources, it's clear that public services must help those in immediate hardship first, while strategies to grow the economy – increasing the number of jobs and wage levels – are the key preventative measures for those at risk of hardship.
This is why a multi-dimensional measure – considering income, the costs of living and subsequent levels of hardship experienced by low income – is vital if we are to distinguish between those in need of urgent intervention and those who will flourish with better economic conditions.
The question is, of course, whether the government's response to the consultation will achieve this. Duncan-Smith's reference to drug addiction today may have simply been to illustrate the point made above more forcefully. Or, along with references to single parenthood, it may be symptomatic of a shift in thinking towards conflating poverty with family breakdown or other social problems.
The Demos analysis also found that the three largest groups of those in child poverty were all two-parent families. The smallest two of the five were single parents, and even one of those reported managing financially and adopting sophisticated budgeting techniques to ensure their children weren't going without.
So by including single parenthood as a key indicator of poverty, one risks overlooking the majority of those on low incomes who need help. We ought to be careful also not to confuse something which increases one's chances of having a low income (a single earner household by definition is likely to have lower income than a dual earner) with an indicator of deprivation or hardship. Promoting marriage might be a goal for this Government, but – based on the evidence – this is unlikely to be the most effective means of combating poverty for the majority of those in hardship.
So while of course there are some families who have multiple social problems which exacerbate the impact of low income, we shouldn't become obsessed by a group who are a fraction of the total number of people who need help.
Today's polling – showing the public most frequently associate poverty with children growing up with alcoholic or drug addicted parents – demonstrates that addiction is most evocative of a deprived lifestyle. It conjures images of squalid conditions, dirty clothes and neglected children. But identifying it as the most evocative factor doesn't make it the most important. As Duncan Smith pointed out today, 100,000 people on sickness benefit are claiming this due to drug problems. That's about 3.8 per cent of the total number of claimants.
Having a badly insulated home, living far from decent shops and facilities with poor public transport, having a disabled child – these all increase the costs of living, and increase the chances of deprivation. These families' plight can't be overlooked in the pursuit of a striking – but nonetheless rare and stereotyped – vision of a dysfunctional alcoholic family.
A strategy to tackle poverty should be one which tackles hardship as a result of low income, in all its guises. Drug and alcohol rehabilitation schemes, criminal justice and social services must all play a role, but to narrow our focus just to these factors would be to neglect the vast majority for whom poverty and hardship is a situation forced upon them, and not of their own making.