A message for the TPA

A recent report from the TPA suggested that we should redefine poverty. Instead of it being 60% of median household income, as it is at present, if we move it to 50% of mendian household income then we\’ve actyually got a chance of being able to afford to both reduce poverty and also make work pay.

Hmmm.

(The OECD defines poor as someone living in a household with less than half the median income, adjusted for family size.)

Oh, OK then, we\’ll just be adopting the international standard as our definition of poverty then.

Excellent, let\’s do that then.

3 thoughts on “A message for the TPA”

  1. Very good point Tim, the message has got through. I think that Mike has mostly focussed on the fact that 50% was the old standard. Though the “European Decency Threshold” is set at 60% I believe.

  2. Median means, if I’m not mistaken, that half of households are above the median income point and half are below. Thus by taking 50% or 60% or whatever percentage of median household income, the poor will always be with us. That is, we will never get rid of poverty because, on this type of definition, it’s a moving feast.

    Or am I just thick?

    Tim adds: No, not thick, just very lightly confused about means and medians. Imagine 100 households in a society. Median income is 50 units. Just pretend for a moment. 50% of median is 25 units.

    Now, we could have that society with everyone making more than 40 units and no one making more than 60 units. Median’s still 50 but there’s no one in poverty because everyone is over 50% of median income.

    We could have everyone on more than 40 units, the m,edian as 50 units and one bloke way out there on 3,000 units. Still no poverty.

    But if income was distributed normally (it isn’t, usually, because there’s a natural lower limit of zero and no obvious upper one) then we would expect to find some poverty….some households on less than 25 units.

  3. Poverty shouldn’t be defined in these terms anyway. It should be defined in absolute terms. The inability to access necessary things. You’re poor if you have no shoes. You’re not poor if the government pays for your shoes.

    And these metrics don’t even try to address where the real poverty is in our society. In many cases, especially child poverty, it is caused by the very people we are giving the benefit money to.

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