Do we need another poverty measure?
The measurement and definition of poverty is back in the news this week. One week after the Secretary of State, Iain Duncan Smith, launched a consultation to find “better” measures of child poverty, two think tanks, Demos and the Centre for Social Justice, have released reports looking at how poverty is measured. This is something we looked at in our recent report for the Joseph Rowntree Foundation.
It’s worth quickly recapping what measures exist already. The Child Poverty Act includes four measures – a contemporary or “relative” measure of low income, set at 60% of the national median for that year, a “fixed” measure, set at 70% of median income one decade ago, a measure of persistence of poverty (being in a low income household for three or more years out of four) and a measure of material deprivation (not being able to afford a number of essential everyday items).
These measures have recently been copied by the OECD and EU in their poverty measurement programmes. So are they really that bad? Iain Duncan Smith based much of his critique of the “relative” measure on the observation that when median incomes fall, so does the poverty line, and hence the number of people in poverty. That is what happened in the most recent year’s figures and does indeed seem perverse.
We should note, then, that the existing measures in the Child Poverty Act do address the problem directly through the fixed income measure. On that measure, child poverty did not fall in the most recent year – the living standards of the poorest did not improve. So the most recent child poverty figures were not good news and should not be celebrated as such.
During the times of growth, poverty on the fixed measure fell substantially, as incomes grew faster than inflation, so focus shifted to the contemporary measure. Now, though, we need to know if the living standards of people in poverty are actually deteriorating, and the fixed measure allows us to do that.
The other main criticism is that focusing on income alone, at the expense of other factors such as health, housing or education, can skew priorities or result in too narrow a focus. Yet, the Child Poverty Strategy, published only last year, does include measures of ill-health and poor educational performance. The Opportunity for All reports, produced under the Labour government (until their regrettable discontinuation in 2007) did something similar. While income is clearly central to our understanding of modern poverty, it really isn’t true to say that income was the only concern.
There is no question that taking a broad view of poverty is crucial - that is what this series of reports is all about. The Demos report launched yesterday, which considers the combination of factors that contribute to and exacerbate poverty, allows for identification of different types of families in poverty.
However, more important than deciding on a broad measure of child poverty is a comprehensive approach to tackling it. At present, the Child Poverty Unit straddles three government departments, but does not touch upon policy areas such as business or housing. In order for any child poverty strategy to succeed, it must have a wider remit than at present. All the data, all the measures we could want, are already there.