Wednesday 5 December 2012

Femininity, complementarianism and exclusion


Femnism and liberalism
I’ve been struggling with how to write on this topic for a few reasons but a few things recently have made me want to tackle the difficult topic of female equality.  I have reservations about writing this because I don’t want to accidentally tell women about feminism. But it’s an interesting political discussion and if equality is a central part of your political program then you have to look at what that equality is and how equality of rights pans out. I believe that my feminism (and I do consider myself a feminist) is an extension of my liberalism. One fundamental element of this liberalism is that your fate should not be determined by the circumstances of your birth. For me the circumstances of your birth include your gender and your society’s stereotypes of how that gender should act.  

Separate but equal
If you’ve been following the debate within the Christian churches around gay marriage and about women bishops then you may have heard an argument that criticises this liberal position. The counter argument criticises the liberal position for not allowing for individual differences. Users of this argument say that rather than wanting equality for men and women liberals want something impossible, liberals want them to be the same.  Instead we should accept that women and men are inherently different and play different roles. For this reason women should not be bishops because being a bishop involves playing a male role and so only men should be eligible. Similarly, gay relationships cannot work because a well functioning relationship requires complimentary female and male roles+. (I’m not trying to construct a straw man here and this is the best I can synthesise the argument, please get in touch if you feel I’ve misrepresented it). This isn’t a new argument and I’ve heard it used before by an Iranian classmate who explained why rules keeping women in the home, raising the family didn’t make them unequal. I’ve heard people who think of themselves as feminists espouse this argument. They say don’t think women should be treated worse than men just not the same.

Different roles
There is something to the argument. There are separate roles in life that are equally valid. It’s not worse to chose to stay at home to raise a family than to work in a career. Often a different kind of person is needed to be a pioneering leader than a caring supporter*.  Me and other liberals don’t think that all people are the same and should be treated the same. People are wonderfully different. My problem isn’t that gender is unrelated to these roles. It might be the case that one gender is more prone to one role than the other (although I have doubts its anywhere near as strong a correlation as some suggest). The problem is where people seek to forbid people on the basis of gender. There is at least one woman in the world who more easily fulfils the worker role rather than the stay at home role.  Why should that one person who doesn’t fit into that traditional role for their gender be banned from fulfilling the role they are better suited to? It seems that violates their rights according to any basic liberal conception. A women who isprevented from preaching is having her right to freedom of religion denied. One person having their rights breached is too much.  Furthermore it is even more important when considering people who don’t identify with either gender. They could play any of the roles described above and gendering them excludes un-gendered people from all.

Dealing with individual differences
In practicalities in everyday life this may get more than a little complicated. If one gender is more inclined to a role than another, then you may well have the case quite legitimately that a job has far more men in than women or the other way round.  That would be fine, but telling that situation apart from one where women are discriminated against because of their gender would be quite difficult to do. Usually it seems to me to be a case of the latter rather than the former.

Not talking about gender roles
 This leads to my final point that talking about these roles in gendered terms is because of what’s been discussed above, inherently problematic. Saying that something is feminine inherently implies that something is for women or that something is masculine implies it’s for men.  Attempts to rehabilitate femininity by some feminists have not helped with this. The problem is not as a Foucaltian would see it, that masculinity has been empowered by robbing femininity. The problem is using these terms at all. Men don’t need to “redefine masculinity” instead we need to stop using gendered terms altogether because they are by their very nature exclusionary.

+The rest of the post is mainly about different gender roles in the context of employment, it’s not about the roles that exist within a relationship although some principles apply (e.g. If it works for one couple then why should it be banned?)
*I find the argument that women shouldn’t be bishops slightly hilarious because the traditional female stereotype is them as caring motherly figures and a bishop is supposed to be a pastoral role.

Saturday 13 October 2012

Smart cards and food stamps


Ian Duncan Smith is according to a Daily Telegraph report looking at giving 120,000 families their benefits through smart cards. Never mind that the 120,000 is a zombie number with no relation to what is being talked about, this is just a bad idea. No matter how priority items are defined this is a bad idea. I’m going to just address two reasons why this is such a bad idea.
Firstly it means that all of those who have their benefits administered through this scheme will be labelled as benefit claimants whenever they shop. This stigmatises the card’s users even though they have done nothing wrong (again look at how the troubled families’ statistic was created). There’s been a strong suspicion that violence against disabled people is rising because they are viewed as undeserving benefit claimants. How do you think people will react when they see people using cards that don’t just label people as benefit claimants but specifically as what the government has defined as the worst of the worst of benefit claimants? If you look at how the troubled families are selected mental illness plays a large part in the selection criteria. I didn’t think it was possible but somehow the government have actually managed to increase the stigmatisation of those with mental illnesses. Even if they do manage to come up a better way of selecting these “troubled families” it will almost certainly still be about the characteristics of one family member but end up stigmatising the whole family.  

Secondly they are trying to create a system that can’t be bartered with and that is doomed to failure. You can’t resell the cards like you can sell food stamps, however you can still sell on the food. But realistically it’s not food that will be the flaw of the system. It will be electronics. If electronics are included then they are incredibly easy to sell on with very little value lost. If they are not then the families involved are effectively excluded from a large part of modern life. A mobile phone is almost essential for someone seeking a job. It’s just not possible to be searching for a job whilst sitting at home by the phone (especially if you can’t buy a computer).

It took me less than ten minutes to think of these really simple problems with the scheme. I guarantee you there are more. But even beyond these practical problems it is an immoral policy. These families would be stripped of their liberty because of their poverty and that is abhorrent. 

Tuesday 2 October 2012

When is a curve just a scribble on graph paper?


A theoretical curve
The theory of the Laffer curve is extremely simple. When you set taxes at 0% of earnings you will take in £0 and when you set taxes at 100% you will take in £0 because no one will work if they get none of the proceeds, and in between these two a curve will exist with the optimal tax rate for gaining the optimal amount of revenue. This seems to be a pretty solid theory but it presents no information on what the curve would actually look like.

The Laffer curve and psychology
A lot of the conversation around the Laffer effect centres on whether or not people would bother to put in extra effort for minimal returns. If that were the case then the Laffer curve could look identical for benefit withdrawl rates as for tax rates. I’ve yet to encounter a country which has their tax and benefit systems that closely aligned. In this country it would mean a marginal tax rate of 65 to 95%, making out of work benefits at destitution levels, drastically increasing levels of in work support benefits or some large shift in-between. This would also put the curve into the realms of sociology and psychology, potentially being able to test the rate at which humans are willing to except returns for their effort. But this curve may be different for different people depending on their current level of happiness or income. However, even if we were able to determine a universal “psychological Laffer curve” it would not be adequate to address taxation policy. The options for people (especially high earners) are not to either do the activity or not but also where to do the activity or what to make that activity look like for tax purposes.

The tax rate and the shape of a society
Extra considerations beyond motivational psychology mean how effective a certain tax rate is depends heavily on the conditions of a society and how it compares to other societies. If a person is working in a country solely because of that country’s tax rate then the Laffer curve for that country would peak far earlier. If the Cayman Islands had a 40% tax rate they would see a huge drop in their tax revenues. There are other considerations aside from the tax rate which causes people to choose to work there. A business needs infrastructure in order to deliver products or services and it needs people to buy these products and services. The debate around tax rates often assumes that what makes a good economy is low tax rates when this only the case it offers limited infrastructure, a limited market and a permissive view to tax avoidance. This means that if we want to find the optimal Laffer tax rate for our country we would have to compare it to other comparable society’s in terms of their existing infrastructure, tax laws and market.  The same is obviously true across time as well. You will get more tax revenue from a lower tax rate in an economic boom than you will from a higher tax rate in a recession because the economy is smaller before tax rate has been taken into consideration.

A dearth of evidence
All the points above should be reasons to take all existing evidence on the shape of a Laffer curve with a massive grain of salt. Of the research that does exist a large amount either fails to take into account the differences between societies or measures an incredibly short period which doesn’t take into account simple factors such as deferred earnings. It is blatantly obvious that if you can afford to choose when to claim your earnings and to pay your taxes (and rich people can) then you will choose to pay less taxes. This does not mean that you would have moved your earnings to another tax jurisdiction if the option to pay less in the current jurisdiction was not available or that you would have chosen not to do that work at all. There also has, as far as I’m aware, not been any research on the effects of anti tax avoidance legislation on Laffer curves.

The HMRC scribble and the 50p tax rateJust when you think that the Laffer Curve can’t get any further from being good evidence based policy, it gets worse. In the last budget the government scrapped the 50p rate of tax for people in the top income bracket. Part of the HMRC document used to justify that change uses a Laffer Curve.  You now might be asking yourself which of the dodgy bits of evidence did they use to justify their particular Laffer curve? The answer is none. Their graph does not actually have a single data point on it. The only justification for the information in the graph is that the government believes that a 45p tax rate is optimum. That would be a legitimate statement if that was all they had said, but it wasn’t. They tried to pretend that their best guess shot in the dark was based on theory and evidence by invoking the “Laffer curve” and creating a graph. You cannot have a competent debate about what is best for the economy if you lie about what you are doing or pretend there is evidence where there is not.  


Tuesday 18 September 2012

Taxation really isn’t theft


The basics of property rights
In recent discussions around tax justice some right wing groups like the Institute of Economic Affairs have argued that it is morally wrong to tax people. They say that the taxation is akin to theft. The argument that taxation is theft comes from the idea that “I own my property and the government has no right to take it from me”. This needs a very strong idea of property rights and that is really hard to justify. If you look through the history of political thought two big arguments from two big philosophers define the debate on property rights, David Hume and John Locke. Subsequent thought has built on them and combined their views but understanding both helps understand the debate.

Government necessitates property rights
Hume’s justification for property rights is that the only type of government that people will accept is one that protects property rights. In his story of how and why government forms property rights play a crucial part for Hume. For Hume it’s a matter of Human psychology that people are not going to submit to a government which is going to take away their property therefore governments must grant and respect property rights. But the important thing to note about this account is that it’s descriptive not moral. People are selfish and so will not want government which conflicts with their self interest. This does not mean that people have a moral right to property simply that they expect property rights from government. One of Hume’s most well known ideas is that we cannot derive morality from facts about the world. Whether or not you agree with Hume it is very clear from reading him that he doesn’t think that these facts about government bring about any moral obligations. You cannot argue that taxation is theft from this point of view because you are talking about a morality which this view doesn’t even acknowledge exiting. The only arguments on taxation and property rights that this view allows is the question of how high a level of taxation will people tolerate.

Property rights come as a result of our labour
Locke’s justification of property rights is one of the most enduring and popular despite its religious roots. It’s more complicated than Hume’s and has far greater range of interpretation but most people agree on the core elements. When we work the land we infuse it with our own labour and we then develop rights to that now developed land because our labour is a part of it.  This works for Locke because the land is owned by God and God desires that we develop the earth. There are two restrictions to this ability to acquire land that arise from our duty to God. We aren't allowed to acquire so much land that it goes to waste and we must leave enough land for others to be able to get what they need. Locke believed that the invention of money circumvented these two restrictions. Money means that we can sell any fruit of the land that we ourselves don’t need and that others do not need to own property in order to get what they need. Instead people can be paid for work and buy what they need. If this actually worked then there would be unlimited strong property rights. But it doesn't. Whilst it is the case that people cannot find work, aren't paid well enough or cannot work then all property holders who have more than they need have no property rights to that extra property. 

More modern takes on Locke
Locke’s justification may seem a little outdated with its emphasis on working the land and God granting property rihgts but the idea that our work means we own what we make is intuitive and some have tried to salvage it. The most appealing to me of the attempts to modernise it are ones that focus communal responsibility. These accounts replace God with the community and say the obligations retained are to the community rather than God because land is communal. The most flawed attempts are those by philosophers like Robert Nozick who try to simply remove God from the equation. They deny that there are any obligations to others and simply claim that by working you have made something and that thing is purely yours. Nozick is one of the founder members of the taxation is theft club. But the problem with this point of view is they fail to deal with the other ingredient that is combined with your own labour. Creativity does not create property ex nihilo. There is always something which is combined with creativity to create property. In Locke’s story there is land, in modern life there is infrastructure that allows businesses to develop. Whether you say it is Government, God or the community something has a claim to that which was used to develop the property along with the persons own creativity and labour.

This is exactly what President Obama was talking about when he said “you didn’t build that”. It should be immediately obvious the stupidity of the republican response “we built this” when they handed out Lego bricks to attendees of their conference asking them to build things out of Lego. Obviously you made the building butsomeone else made the Lego. Another party (government, God or community) invested something into your property and therefore they also have a right to whatever you produce. Taxation isn’t theft in as much as it is simply the other party claiming the proceeds from their investment.

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Wednesday 12 September 2012

Poverty is about money, to say otherwise is perverse


Ian Duncan Smith is speaking again today about how poverty should be defined using terms other than money. Future measures of “poverty” that could be measured include family breakdown, drug addiction and worklessness. Whilst these are all bad things, they are each distinctly different from poverty. Only 37% of children in poverty are in single parent families and only a tiny proportion of those in poverty suffer from drug or alcohol addiction. This is well documented stuff.

If you measure family breakdown then a large proportion of what you will find will be family breakdown that occurs in rich households. Similarly drug or alcohol addiction isn’t limited to poor people. If the government aims to fight poverty by fighting relationship breakdown and addiction then that is a valid strategy. These things do have a negative effect on people in poverty (as I said earlier they are bad things). But if they are successful then you will eventually see the regular rate of poverty (measured by income) fall as these people come out of poverty. If however you measure poverty by looking at family structure and addiction as well as introducing policies to fight them then your results will look better than reality for people in poverty.

Government schemes tend to be more effective at helping already better off people.  A King’s Fund report looking at unhealthy behaviours showed Labour’s public health measures were successful at reducing unhealthy behaviours but this was mainly within already well off families. Part of what justified spending money on public health initiatives is because poor health is a much bigger problem for people in poverty. If the government puts money into fighting family breakdown it’s reasonable to believe that the main beneficiaries will be well off families. If the rate of family breakdown is part of measuring poverty then that measurement of poverty would fall without anyone actually in poverty being affected. This is a much better example of a perverse effect than the one cited by IDS.

Problems with measuring worklessness aside, unemployment is already measured and is a politically important number by itself with or without being taken as part of the definition of poverty. The majority of children in poverty have at least one parent working. But that’s not the crux of the issue. The crux of the issue is that if you are employed and live a perfectly healthy lifestyle but simply can’t afford to pay your everyday living cost then the government do not have a policy to help you. The government’s social justice strategy is devoid of anything that would help people who have a job that doesn’t pay them enough to get by. This could be because they don’t actually believe them to be poor but if that is the case then the government should just say so. It would be interesting to see how low a standard of living they would set as acceptable because as I’ve discussed before most would define the current as below acceptable.

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Sunday 9 September 2012

Motherhood and apple pie: Politicians and Values


Selecting for values
I talked in the last post about how one of the functions of politicians is to act for proxies of us in parliament and we partially select them to make the right decision and judge them on perceived competence. However not all issues are right and wrong and competence isn’t the only the criteria we use to select politicians. The other criteria we use to select politicians is values. We want politicians to support projects which are in accordance with our values and not support projects which are in violation of our values. We are not aware of every current policy or every potential future policy responding to situations that arise but we hope that a politician with the right values will support the right policy. 

There seems to be two main ways that politicians show they share our values. First they highlight which policies they support and explain how this shows they have value X or Y. Second just go straight ahead and tell us what their values are either by saying “I love motherhood and apple pie” or by making judgements on cases “Bob is wrong to steal all the apple pie in the world”.

Values that don’t need selecting for
The odd thing is that most of the time when talking about values politicians talk about values that pretty much everyone has. Everyone thinks that hard work is a good thing. Everyone thinks that the neediest people in society should be helped. Everyone likes families. There is not a rogue politician out there who is trying to outlaw families. Nor is there a politician that thinks poor disabled people should be crapped on.  Politicians and campaigners talk about these values in order to make you think that their opponent does not value this thing. But as soon as you think about this for more than a second and realise that everyone in politics is a human being it is clear that this isn’t the case.

Right wingers don’t want to hurt disabled people. They genuinely think that removing state support in certain cases will help people help themselves. Left wingers don’t think that unemployed people should sit around living off the dole. They genuinely think that removing state support will make people less likely to get a job. Both have arguments to support their case. These issues actually boil down to competency and not values. But more often than not they politicians use them as evidence of their values.

Prioritising values
Aside from a few outliers politicians actually share most of their values. Where they differ is that they value one thing more than another. Whilst everyone likes motherhood and apple pie but not everyone wants to sell their mother for an apple pie. For example it could be argued that they value families more than hard work in their support for a redistributive system that takes money from earners (who work hard) and giving it to families. But no one does say this instead left wingers describe it as them supporting families (and implying or directly saying that right wingers don’t like families). Right wingers describe the same policy as not supporting hard work.

Value questions in politics are all about tradeoffs otherwise they are not value questions but instead competency questions. The two types of questions should be discussed differently. Questions of competence should be answered in a debate on evidence of what works and what doesn’t. Questions of values should be about tradeoffs. They obviously overlap often but the distinction is still important.  

Too often questions which are simply ones of competence are portrayed as ones of values. Other politicians are accused of not valuing the right things when in fact they are simply not achieving what they aimed to achieve. This happens to all governments, policies do not always achieve what they aimed to achieve. Often it is simply a politician being making an incompetent decision and not realising rather than being evil.  Political debate would be so much better off if we realised that rather than continuing the values confusion.

Wednesday 8 August 2012

We don’t care but that’s ok: referendums, valence issues and democracy


Philosophical context
Classical political philosophy sets out three types of government, Monarchy, Aristocracy and Democracy. Monarchy is a government of one person, Aristocracy is a government of less than half of the population and Democracy is a government of more than half of the population. By viewing politics using these terms there are currently no democratic nations (as far as I’m aware). In the UK we have a government of at most a few thousand (Members of the Commons, Members of the Lords, Local authority councillors and judges) or a lower estimate of 22 (Cabinet Ministers) with a total population of around 62 million. We are therefore a semi elected aristocracy (with us electing Local Councillors and Members of the Commons). This system of Government is what caused the political philosopher JJ Rousseau to remark “The English people believes itself to be free; it is gravely mistaken; it is free only during election of members of parliament; as soon as the members are elected, the people is enslaved; it is nothing. In the brief moment of its freedom, the English people makes such a use of that freedom that it deserves to lose it.”

To the modern speaker it sounds appalling that we should be ruled by an aristocracy but that is partly because of how we use the term in modern English and how we use the term democracy. A democracy according to the classical definition would have more than the half the population making the everyday decisions of government not just electing people to make those decisions. This kind of government is actually now more practically possible than it has ever been in the past with smart phones potentially allowing people to make decisions and receive information anywhere at any time. There are two good reasons why a pure democracy is worse system of government than a semi elected aristocracy. Firstly most people don’t know enough to make most decisions but secondly and more importantly most people don’t care.

Most people don’t care about most government decisions
When I say that most people don’t care about government decisions I don’t mean that they don’t care about the outcome. I mean they don’t care about the decision itself. When choosing how much private companies should be allowed to operate NHS services the most popular answer amongst the general public is essentially "I don’t mind as long as the NHS is still good". For most people many of the major issues of politics are valence issues. I believe that people when asked questions on politics are more likely to say they care than they actually do because we view not caring as a negative social trait. Even if this isn’t the case many solid polls show that the most popular opinion (if not the majority opinion) is "whatever works”. It is more important that the government makes the right decision than whatever the decision they take actually is. People want low unemployment more than they care about whether we should cut the deficit or not.

This isn’t a bad thing. Even for a political obsessive like myself there are whole departments of government (DEFRA for one) where I have no opinion on what they should do, just that they should make the right decisions whatever they are. They are important decisions that matter a large amount to interested parties and probably eventually have an effect on my life but that does not mean that I will have an opinion. I care that they get it right and I will support whoever to the best of my knowledge I believe will get it right. Essentially this is one of the main reasons that we elect politicians, to have an opinion on these subjects and to make sure the right decision is made.

If we don’t know and we don’t care when should we get a say
With the justification for the political system outlined above there remains the question of when if ever should we have a referendum. I would say that it is fairly obvious that we shouldn't have a referendum on valence issues because most people don’t care and it makes little sense for them to have a say in them. So the first requirement of a referendum should be that it is something which the general public is interested in and not something that the public are simply interested in it being done right (economic policy would be the perfect example of this). I would contend that voting systems and constitutional structure fit within this bracket. I’ve not seen a poll on this but I am fairly confident that people would be of the opinion that we should have a fair voting system, rather than being of the opinion that we should have first past the post or the alternative vote. Similarly people   want an efficient and accountable local government more than they care if they have an elected mayor or not. The fact that this has been ignored in recent referendums explains the extremely low turnout where they were the only votes happening on those occasions and drastically decreases the importance of the results. I believe that a referendum on reforming the House of Lords would see similar results. There is simply not a good case to make on having a referendum on any of these issues. On the other hand an issue like whether or not to have a death penalty seems to be a good issue to have a referendum upon if the general public are divided over it because it is clearly not a valence issue.

The issue of the European Union is a far less open and shut case. Far more people seem to have an opinion on our relationship with Europe and the “I don’t care as long as it is done right” option though still significant is less dominant. However it is not ideally suited for a referendum. There are many different answers to what we would like our relationship with Europe to be, many of which cannot be achieved simply by changing our countries policy. This means any question that would be difficult to draw up and many of the answers it gives could only have a guiding effect on policy. It is also not a great issue for a referendum because it is very complex. It would be very difficult to ensure that the entire electorate was sufficiently educated about the costs and benefits of the issue. However this shouldn’t necessarily be seen as a reason to give control of this decision to elected representatives.  These representatives have to be educated on the issue and in theory if that is possible then it should be possible to educate the general public. In practice I think many MPs are just as ill informed about Europe as a general member of the public.

I think it’s important to look at our general structure of politics before making any decisions about whether or not to hold a referendum and look beyond manifesto commitments or the size of the change to why we elect politicians in the first place.  Just because an issue is important or big does not mean it’s a good issue to have a referendum over. The economy is extremely important but it would be a terrible idea to have a referendum over economic policy.

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Wednesday 25 July 2012

How do you measure success: reported well being, poverty and GDP


The Employment Retention and Advancement (ERA) project was a scheme piloted across the country with a randomised controlled trial. The scheme essentially gave people advice and support for gaining work and advancing further within that work as well as providing bonuses for getting work, staying in work or advancing further in work. The results from the pilot have been very positive especially among certain groups. It increased earnings even after the scheme was finished. However new research (unfortunately not published yet) has suggested that whilst income increased reported wellbeing decreased. Before seeing this new research I had supported the implementation of the ERA into policy because of its wonderful support in evidence. I hate to be the person that supports evidence based policy but then objects to a bit of evidence that disagrees with a policy they like but I think there is something to be said here. The fact the policy intervention decreased reported well being doesn’t necessarily mean it shouldn’t be implemented. This is something worth looking at beyond just the ERA and fits into the wider GDPvs well being debate. I believe that as things currently stand there are good reasons to argue for reported well being not being the final arbiter of policy. Some of these arguments are applicable to the ERA but some are not due to the fact that there it causes only a small increase in earnings and a very small decrease in reported well being.

Reported well being is not a perfect measure of utility. You might have noticed that I keep saying reported well being instead of simply well being. This is because that’s exactly what it is. It is based on a series of questions asking a person how they feel now and about the future. This method of assessing well being has some support as being an effective measure and is relatively stable. However it doesn’t necessarily represent the overall happiness of the person surveyed. By tweaking the questions slightly you can massively change the results. Whilst there has been some settling on reliable questions to ask this weakness to fiddling provides a hint of the soft nature of the results. As obvious as it sounds it’s worth saying that there is no way of going into someone’s brain and finding out how happy they are. When compared to the study of how having more or less money effects people’s lives this measure looks very weak.

There on the other hand several morally relevant things which we know are strongly linked to a lack of money. We know poverty causes a lower life expectancy, fewer life chances, less life stability and many other things. As far as I have seen the links with reported wellbeing and these things have not been shown to be as strong or as well supported with evidence. It seems reasonable that we should increase want to increase these positive effect even if it does create a decrease in well being. One does not simply overrule the other but there is good reason to say that a small decrease in well being is worth it if there is an increase in these other positive effects. This could be rendered pointless if further research into wellbeing showed a stronger link with life expectancy etc but for now it’s still a point worth considering.

If an intervention is cost saving, like the ERA is in certain groups, then reported wellbeing of those directly effect is not the only relevant wellbeing. The ERA was shown to save the government money because of reduced benefit spending compared to the costs of the program. This means that this money could have been spent on other goods or services (e.g. raising other benefits). Therefore any loss of wellbeing resulting from this intervention would need to be offset against the potential for it to be raised elsewhere. When looking at how to make savings in government a program like this should be obviously preferred over a simple spending cut elsewhere.

Tuesday 10 July 2012

How poor is poor: relative poverty and minimum income standards


There is a persistent problem in addressing poverty in developed country. People often cannot agree on where we should draw the line between poverty and an acceptable standard of living. This is one of the core issues behind discussions of redefining poverty, benefit levels and work incentives.  Everyone agrees that people in destitution are in poverty and, asylum seekers aside, our benefit system mostly prevents that. However once we go beyond destitution there can be massive amounts of disagreement about who is experiencing “actual poverty” and consequently who must be helped. Some people view destitution as synonymous with poverty whilst others would say that those who do not have an acceptable standard of living are in poverty.

The Labour government in 2010 introduced the Child Poverty Act which included three definitions of poverty: those who have less than 60% of the median net household income this year, those who have less than 60% of the median household income of a fixed base year, and those who experience material deprivation. These definitions suggest many of the people on the benefits system in poverty, especially those who do not work. This definition flies directly in the face of stories repeatedly reported in large swathes of the mainstream media that benefit claimants have a comparatively high standard of living. It also contradicts many people’s personal experience who report to have lived on lower amounts than the official poverty figures without feeling deprived instead feeling that they “managed to get by”. Whilst some of this reporting can be explained by a time lag (many of those reporting will be looking at the current poverty line and comparing it with earnings which their family had in an earlier period) and rising cost of living, this comment shouldn’t be simply dismissed. If people feel that the level of poverty defined by the government and charities is above what they consider poverty then it may diminish support for action to fight poverty.

This has lead to a large amount of criticism of the relative definition of poverty (60% of the median). The suggestion is that this measures inequality rather than poverty itself. Whilst some of this criticism comes from a misunderstanding of averages confusing the median with the mean, there is a certain amount of truth to this. For example poverty officially fell in the year 2010/11 and this is partly explained by the fact that the median household income fell. This produces the jarring fact that poverty fell whilst standard of living for all involved decreased.  In response the government have proposed to redefine how we measure poverty but none of the measures they have mentioned are decent measures of poverty (I may explain why in another post but it’s too long for this one).

Another approach would be to look at what a person would need and working out the level of income needed to achieve that. This is the approach taken by the JRF in their Minimum Income Standard research which they have just updated today. Their research is based upon focus groups of the wider public looking at what is needed to have an acceptable standard of living. You can see how the budget works out here. As you can see from this it advocates a larger budget than the relative poverty line and a lot more than the level of benefits. It doesn’t measure the bread line as much as it measures the bread, butter and jam line. But looking through the research you can see that by cutting down different budget elements you decrease the overall amount but also gradually decrease the standard of living. It’s also important to remember if you remove elements such as the amount spent on household goods then when these items break (as they do) a family may have to take out a high interest loan to replace or repair them which greatly damages their budgeting.

A breadline isn’t easy to spot from the JRF research. Whilst it’s a great piece of research it doesn’t provide a simple answer to the welfare policy problem (nor does it intend to).  If the benefits system were to provide a standard of living equal to the minimum income standard it would be far more expensive than it currently is. This is the case even if the aim was only to support those on full time minimum wage to that standard. But it does show that what we call poverty at the moment is well below an acceptable standard of living when people are asked to define one. 

Previous work

Until last Friday I worked for the Joint Public Issues Team of the Methodist Church and whilst there I wrote a  series of blog post about public policy. I enjoyed it so much that I started this blog to continue writing on the same kind of issues now in a personal capacity. Here are some links to previous blogs I wrote whilst I was there:

A blog on Universal Credit and the Government's Digital First approach (24/10/11).

A blog on Disabled Living Allowance reform (11/1/12).

A blog the Daily Mail's reporting of material deprivation across Europe (9/2/12).

A blog on Workfare and work experience (24/2/12/).

A blog on worklessness, unemployment, the use of language and disability (26/3/12).

A blog on low turnout at local elections (4/5/12).

Two blogs on David Cameron's proposed changes to the welfare system. One focusing on the propsal to remove housing benefit from those under 25 (26/6/12). One looking at the issue of perverse incentives in the welfare system (27/6/12).

I hope to improve upon what I've written so far and will probably continue to discuss similar topics. However, I will no longer have someone proof reading my work so there may be more grammatical errors from here on out.