Here on Global Citizen, we talk a lot about the various consequences of extreme poverty. Whether it’s a family being unable to send its kids to school, the inability to afford basic medicines, the necessity of drinking dirty water, or any number of other things to do with wellbeing and opportunity. When people find themselves in situations like these, breaking the cycle can be virtually impossible. Currently, the World Bank defines “extreme poverty” as having less than US$1.25 per day to live on.
But what about poverty in wealthy countries?
Yep, pretty much every country has people living in some form of poverty. But in countries like Germany, the US, the UK, and Australia, it doesn’t tend to be people living on less than $1.25 per day. What we’re looking at here isn’t extreme poverty, it’s “relative poverty”. These people aren’t generally severely malnourished or dying from easily preventable diseases, but they are deeply disadvantaged in their own communities, and are facing battles of their own in terms of breaking the cycle of that disadvantage.
The extreme poverty line is well defined - it’s the $1.25 per day. The term “relative poverty” gives a clue that it might be harder to define… it’s not an absolute measure, it’s a comparison to the level of income of other people in the community. In the UK, the Government decided in 2010 that a British child is living in poverty if they live in a household whose income is below 60% of the nation’s average. This is the measure also used by many other countries.
So, as an example, if UK average household income is £10,000, a child is in poverty if their household earns under £6,000. A recent report suggested that the average UK family with two kids actually earned £31,300 last year, so 60% of that number is just under £19,000. So there’s your poverty line. Easy, huh?
Finding a better way to measure poverty
The UK Government has concluded that the trusty formula from 2010 was a little bit TOO easy. Allow me to explain why. Back in the first paragraph of this article, I mentioned the various consequences of extreme poverty, but because those consequences cause a cycle of disadvantage, you can also see them as the causes of poverty.
Is it fair to say that illiteracy is a cause of poverty? Yep. Can preventable diseases cause poverty if they’re not treated? You bet. This is what prompted Iain Duncan Smith, the UK’s Work and Pensions Secretary, to comment that the 60% measurement system is "deeply flawed and a poor test of whether children's lives are genuinely improving".
What will the new measurement of UK child poverty will look like? The finer details of this one haven’t yet been released. What we do know so far is that there will be a stronger focus on measuring unemployment, educational attainment, and a range of other indicators to measure other causes of poverty such as family breakdown, debt, and drug / alcohol dependency, reporting annually on how these indicators affect life chances.
Does this represent a real turning point for eliminating child poverty in the UK?
Let’s put it this way… if a person is on fire, do they want someone to build a better thermometer so that they can measure to an extra decimal place just how hot those flames on the back of their head are, or are they more just hoping that someone will give them a bucket of water very very quickly?
Ok, so looking for a more meaningful way to measure things is still a good thing to do. It makes it possible to create better responses to problems (like how big the water bucket needs to be in order to get the job done, perhaps). But better measurement isn’t everything - whether it changes the lives of children depends on whether there’s strong action and funding to help families to break the cycle of disadvantage (like someone going and fetching the bucket and putting water in it).
I hope that when the finer details of the new child poverty measurement are released, that they help the UK Government to better identify people who need support, and that the support doesn’t just lift them temporarily across an imaginary income line, but instead gives them the tools to create their own successes in life. But if this whole process is done badly, it could end up as a way to deny assistance to people who are stuck in a cycle of disadvantage, and make the gap between the "haves" and the "have nots" even greater.
And what about extreme poverty elsewhere in the world?
It’s a good question. If the UK Government thinks that there’s a better measure than income level to determine who is living in poverty and needs support, then it’s worth investigating whether extreme poverty around the world can be measured in a better way, too. I’ll leave that little task to the hundreds of analysts at the World Bank, but it’s an interesting idea. Is poverty more about disadvantage than it is about income? Part of me suspects that it is.