My word, this is amazing Polly!

This week Byrne was gifted the Institute for Fiscal Studies (IFS) report, a hard-headed impact assessment of tax and benefit changes that found children hit hardest and non-working lone parents losing £2,000 a year. Half a million families with children under 5 will fall into absolute (not relative) poverty, despite all Cameron\’s mendacious \”social mobility\” cant.

Really? Absolute poverty means less than $1.25 a day on a PPP basis according to the World Bank.

I sorta tend to doubt that\’s really going to happen.

But there is another meaning of absolute poverty. Relative poverty is less than 60% of median earnings adjusted for household size. Absolute poverty is less than 50%.

So, absolute poverty is still relative, d\’ye see?

Amazing what you can manage if you\’re allowed to define the meanings of words.

16 comments on “My word, this is amazing Polly!

  1. Not quite Tim, but close

    “An individual is in relative income poverty in a particular year if their household income is
    less than 60% of the national median household income in that year. An individual is in absolute
    income poverty in a particular year if their household income in that year is less than 60% of the
    2010–11 national median (in real terms).3 Household incomes are measured net of taxes and
    inclusive of benefits and tax credits, and are equivalised using the modified OECD equivalence
    scale. Incomes are measured both before and after housing costs have been deducted (though
    note that the Child Poverty Act refers only to incomes measured before housing costs have been
    deducted).”

    http://www.ifs.org.uk/comms/comm121.pdf

    In one of their final acts in government, following their destruction of the economy and imminent replacement, the Labour party, in the Child Poverty Act 2010 completely redefined the meaning of the word ‘Absolute’ from universal and undiminishable, to, well, it’s antonym, relative.

    Newspeak, doublethink?

  2. If Winston’s correct, it’s currently possible to be in “absolute poverty” but to have too high an income to be in “relative poverty”.

    Absolute poverty was (according to his quote) defined as 60% of median income in 2010/11, and then is uplifted each year for RPI.

    Relative poverty is 60% of median income in the year in question, i.e. it rises with average wages.

    Currently RPI is higher than average gross wage increases (and their measure, median after-tax wages, are going up by even less thanks to the NI increase).

    So the “absolute poverty” level is now higher than the “relative poverty” level.

  3. It’s fatuous anyway; we need an absolute poverty level set at the price of a generally-agreed basket of goods and services.

  4. Actually Timmy, on the matter of incomes, I was pondering the other day the “gender pay gap”. A few queries/things to think about…

    1. Has anyone ever studied post-benefits incomes?
    2. It’s said that men earn more but women get to spend more, maybe household chores should be considered casual labour (for purely economic purposes, I wouldn’t bring this up with the wife)?
    3. This is interesting…
    http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/ashe-results-2011/ashe-statistical-bulletin-2011.html#tab-Public-and-private-sector-pay
    “For part-time employees, the gender pay difference in the public sector was 18.3 per cent, a decrease from the 2010 figure of 20.5. In the private sector, women’s part-time hourly earnings were higher than men’s, resulting in a negative gender pay difference of -1.2 per cent, compared to -1.9 per cent in 2010.”

    The entire part-time gender pay gap is accounted for by the public sector.

    4. In debates regarding gender pay/motherhood I am usually told that having kids is something of a social necessity, wiping arses in old age or something. Is this not one area then where the cost should be socialised, the individual business shouldn’t pay the costs of their staff having children, society should pay that cost.

  5. “4. In debates regarding gender pay/motherhood I am usually told that having kids is something of a social necessity, wiping arses in old age or something”
    All the people I know who get paid to be pro Mums don’t produce children that will be off much use to us. Also subsidising workers to have children would be much cheaper than the amount single mums cost us!!

  6. The absolute poverty threshold has to be much higher than $1.25 a day in the UK. Obviously defining it as a lower than relative poverty threshold of median income is daft but it’s equally daft to talk about something you could possibly just live on in an African backwater.

    I also wonder about the opportunities/incentives for informal production in the UK as opposed to African backwaters – for a lot of the dollar a day folks are living mostly off their own production which never gets exchanged for money and doesn’t show up in the statistics. Not saying it isn’t a shitty life, but still a bit less desperate than the statistics seem to show.

  7. Since refugees (classified as asylum seekers while some fat civil servants debate whether they might get raped and murdered if sent back to a country that has been running a civil all their life) get *half* of the minima paid out to UK or EU citizens on benefit we *can* take a view on absolute poverty in the UK – it’s something less than the amount New Labour will tell refugees to live on.
    Losing £2,000 a year – well before you can do that you need to *get* £2,ooo a year.
    The rest of this comment is censored.

  8. The approach to define poverty as a relative percentage is as boneheaded as defining an absolute value that is only valid in a few places.

    $1.25+1c(so you’re above the poverty threshold) does not buy enough food, heat and shelter to survive in Britain in the winter.

    Is it really that difficult to establish a decent definition here that actually has meaning everywhere where it’s used and that is flexible enough to move with the current prices?

    It’s one thing to complain, but another to bring something better…

  9. Hexe this is a better attempt

    David Gordon’s paper, “Indicators of Poverty & Hunger”, for the United Nations, further defines absolute poverty as the absence of any two of the following eight basic needs:[8]
    Food: Body Mass Index must be above 16.
    Safe drinking water: Water must not come from solely rivers and ponds, and must be available nearby (less than 15 minutes’ walk each way).
    Sanitation facilities: Toilets or latrines must be accessible in or near the home.
    Health: Treatment must be received for serious illnesses and pregnancy.
    Shelter: Homes must have fewer than four people living in each room. Floors must not be made of dirt, mud, or clay.
    Education: Everyone must attend school or otherwise learn to read.
    Information: Everyone must have access to newspapers, radios, televisions, computers, or telephones at home.
    Access to services: This item is undefined by Gordon, but normally is used to indicate the complete panoply of education, health, legal, social, and financial (credit) services.

    http://en.wikipedia.org/wiki/Poverty_threshold

    It’s far more in step with what the average person would consider poverty.

  10. The World Bank takes the base for it’s Purchasing Power Parity level of $1.25 from the “15 poorest countries in the world” and in 2005 dollars. I suspect that when you calculate the PPP level for the UK, you are going get slightly more than than the simple 81p per day.

  11. The problem with the defining poverty in a relative way occurs when one starts trying to move people out of poverty. We have a bell shaped curve of equivalised income. There is a vertical line at the median value. There is another line at 60% of that value. The intention is to move all the people below the 60% line to above it. The problem in so doing is that the median line moves up. Leaving onw with the conclusion that theonly way to achieve this is to narrow the difference in oay between the richest and the poorest which can only be achieved by income re-distribution.
    Assume that this had been achieved, without rigid enforcement of the same pay rise percentage for all, then people would slip back into poverty. This would mean massive state intrusion into pay and pay rises.
    Far better to go with the David Gordon’s “Indicators of Poverty & Hunger” and try to ensure that all citizens were able to meet this minimum criteria.

  12. I cannot type it would seem. The sentence should read:
    Leaving one with the conclusion that the only way to achieve this is to narrow the difference in pay between the richest and the poorest …

  13. Why does that move the median line up?
    ——

    Worth remembering that most people seem to think in relative poverty terms, not absolute. You can see this in everyday speech ‘it’s a poor part of the city’ is not usually answered by ‘not compared to Chad’, but also by opinion polling on what constitutes poverty.

  14. Matthew,

    The World Bank use PPP to provide a degree of relativity. But it is relative in the “food, shelter, basic services” level, not the “only a 40″ plasma”.

    Median is the middle of the frequency distribution. It doesn’t necessarily move if the extremities move. For example (although you clearly have got this), if you have 100 people, 10 on £10 per day, 80 on £50 per day, and 10 on £1000 per day, the median is £50. You could increase the income of the poorest 10% to £49.99 without changing the median at all (and, I suspect, by limits, to £50 depending on the precise mathematical definition in use.)

  15. Would I therefore be right in thinking that the way to slash poverty at a stroke is to shift the burden of taxation from the rich on to those within 10 per cent of the previous median income?

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