On the subject of poverty porn

We here at the ASI thoroughly support the idea of food banks. Who wouldn’t support the idea of voluntary cooperation to feed the hungry? Even, of a private sector organisation that was able to fill in for the malevolence and or incompetence of the State?

However, that’s not to say that we need go overboard and swallow uncritically everything we’re being told by the poverty porn campaigners. To take just one example, this piece in The Independent.

 Christmas shoppers are expected spend £1.2bn today, as 13 million consumers hand over £21m every minute. But while those who can afford it stock up in the desperate rush for gifts on “Panic Saturday”, another 13 million people will have more sobering reasons to worry – living in poverty in a festive Britain characterised as “two nations” divided.

That 13 million living in poverty. It’s a highly arguable number. Depends on what your definition of poverty is and how you’re calculating it. And the way that it is calculated is that it’s a measure of inequality, not of poverty. It is less than 60% of median income adjusted for household size either before or after housing costs. To get that 13 million figure it is after housing costs. If before, it is rather lower:

The number of people in the UK living in poverty fell by 100,000 in the past year to 9.7 million, according to official figures.

The data suggests the percentage of those in poverty is at its lowest level since the 1980s.

Poverty is defined in this context as when households have an income before housing costs below 60% of the median.

Note that this is still not a measure of poverty. It is a measure of the income distribution perhaps, of inequality, but not of actual poverty.

Fortunately we do also have a measurement of poverty, of actual material deprivation:

Trends in combined low income and material deprivation and severe poverty:
New material deprivation items were introduced in 2010/11. The proportion of
children living in low income (below 70 per cent of equivalised median household
income, BHC) and material deprivation and severe poverty (below 50 per cent of
median household income and in material deprivation) for 2011/12 has fallen to 12
per cent and 3 per cent respectively in 2011/12, representing a 1 percentage point
fall for both measures compared to 2010/1122. As the proportion of households with
children falling below the 70 per cent and 50 per cent low-income thresholds
remained the same in 2011/12 compared to 2010/11, this fall was primarily driven by
a decrease in the proportion of families experiencing material deprivation.

That is, whatever it is that is being done about poverty is reducing it by the measure that most of us would use in a colloquial sense. Material deprivation is falling. This might even be at the cost of more inequality in the use of those relative numbers. Possible causes there are reductions in general benefits and the targeting of that benefit and or tax system at the truly poor rather than simply at those just under 60% of median. Which, if reducing poverty is your goal seems like a pretty reasonable idea to us really.

What has really happened here is that in the past few decades the institutional definition of poverty has changed. Beveridge was not worrying about whether families had 50% or 60% of what everyone else had. He was worrying about whether there was dripping on the bread for tea. As that problem largely became solved the definition was shifted so that we are all urged now, in the official figures, to worry about inequality, not that actual poverty that so effectively tugs at our heartstrings.

Essentially, as the problem was solved the definition was changed so that there would still be something to berate us all with.

There are, of course, other inconsistencies in the numbers being thrown about:

The Trussell Trust warned it is expecting its busiest Christmas ever in providing emergency rations – with one million people now relying on food banks run by the charity and other organisations.

That’s not so either. The general meaning, the colloquial takeaway from that, is that 1 million people are dependent all of the time on those food banks. Not so at all. The actual number is that over the past year 1 million people or so have been served by a food bank once or more times (and generally the limit is three days food in one visit and only three visits allowed). That gives us 8,200 people actually relying upon a food bank on any one day.

Yes, we can still say that that’s too many people, we can still say that we’re delighted that people give up their own time and money to fill in for the inefficiencies of the State. But it is a rather different picture of the scale of the problem being solved, isn’t it?

As 2014 draws to a close there are 13 million people in poverty – including 27 per cent of the 2.5 million children in the UK, according to the Child Poverty Action Group (CPAG).

Again this is inequality of income, this is the below 60% of median equivalised household income. This is not poverty nor is it material deprivation.

Inequality in the UK is now so extreme that the five richest families are wealthier than the bottom 20 per cent of the entire population, according to Oxfam.

Of course. This happens with absolutely every conceivable wealth distribution. For it is entirely possible to have negative wealth (in a manner that we do not record negative incomes). That newly minted Oxbridge graduate about to start earning £100k a year in the City is recorded as having negative wealth as a result of student loans. The truth is that if you’ve got a £10 note and no debts then you are richer than all of the bottom 20% households in the wealth distribution. No, not just richer than each one of them, richer than all of them in aggregate.

Meanwhile, the housing charity Shelter predicts that 93,000 children will be homeless this Christmas, as the number of homeless families trapped in temporary or emergency accommodation exceeds 60,000.

Interesting how that number is made up don’t you think? As a society we provide temporary and emergency housing for those that need it. When we do so they are still classed as being homeless. This does have an inevitable effect: the crisis never goes away, does it?

The general numbers we get thrown at us about poverty in the UK are not actually about poverty in the general meaning of that word. They are about inequality in the distribution of income. Of course, you can worry about that inequality if you want to do so. But the reason those measurements have been changed, the reason that the “relative” so often gets dropped from “relative poverty”, is because those who wish to spread this poverty porn know very well that most of us are concerned about, would happily do something about, actual poverty and as to inequality, well, there’s a general reaction of “Meh”.

As such we must be fed the figures about relative poverty so as to tug at our heartstrings as if it were absolute poverty, that material deprivation.

Or, the TL:DR version: they’re fiddling the figures.

Finally, one further calculation. There’s some 8,000 people a day receiving those food parcels. Let’s say each parcel is worth perhaps £30 (we’ve got to use some sort of estimate after all). That’s around and about a £90 million a year problem. One of the solutions proposed is that the minimum wage should be raised up to the Living Wage. That’s a pay rise of £2,000 a year for 1.3 million people or so (taking only the number paid the current minimum wage, not including any effects on those between it and the Living Wage).

It’s a £2.6 billion partial answer to a £90 million problem.

It might well be better to continue with the food bank solution.

Maybe Keynes was right after all?

It has to be said that we’re not great fans of macroeconomics around here. Not enough good data from enough different places to definitively answer most questions: and that’s before we get onto Hayek’s point about simply not being able to calculate the economy without using the economy itself to do so. However, this makes us think that Keynes might well have been right on one point:

It took far too long but Britain’s traumatic national pay cut is coming to an end. Even on the somewhat crude median earnings measure, pay is finally going up again, even after accounting for the effects of price rises. Wages are rising a little faster and inflation has collapsed, a golden combination for employees across the country.

Ever since the Industrial Revolution and the spread of capitalism, gradually rising wages have been the norm, apart from in wartime and during brief periods of extreme economic dislocation. The fact that this process went into partial reverse over the past few years despite the recovery came as a shock and helped to explain why so many people began to fall out of love with capitalism. It is therefore excellent news that normality is finally re-establishing itself.

One view of unemployment is simply that it happens when labour is more expensive than people are willing to pay for it. That’s obvious in that one sense of course. The question becomes then well, how quickly will the repricing happen if we do ever get to that stage? There are those who insist that it happens immediately and thus unemployment and recessions cannot happen. Not an entirely convincing view. There are also those who insist that it can take forever and this justifies all sorts of interventions. And then we’ve got the evidence of the past few years.

It could be argued that labour in the UK did become too expensive. We had just had the largest and longest peacetime expansion of the economy after all. So, a repricing was necessary. And this is where Keynes could be said to be correct. It takes time because nominal wages are sticky downwards. People really, really, don’t like lower numbers on their paycheques. They’ll grumble about their real wages falling if it’s disguised with a little bit of inflation but they’ll riot if the equivalent fall were at a steady price level.

We don’t say that the past few years prove it: only that what evidence we have is consistent with this explanation. And, given the paucity of our evidence base, that’s probably the best we can do.

As we’ve been saying, there isn’t really a gender pay gap

But there is a motherhood pay gap. Interesting research:

Studies from countries with laws against discrimination on the basis of sexual orientation suggest that gay and lesbian employees report more incidents of harassment and are more likely to report experiencing unfair treatment in the labor market than are heterosexual employees. Gay men are found to earn less than comparably skilled and experienced heterosexual men. For lesbians, the patterns are ambiguous: in some countries they have been found to earn less than their heterosexual counterparts, while in others they earn the same or more.

The results for the UK are that gay men earn less than hetero, lesbians more than hetero women. In fact, lesbians earn around what men do and gay men earn around what hetero women do.

We could, as this report does, speculate about societal standards, the idea that lesbian women have, in some manner, “male traits” which lead to that higher pay.

A much simpler observation of the evidence would be the influence of children. We know that fathers earn more than non-fathers among hetero men (yes, even after adjusting for age and education etc). Also that mothers earn less than non-mothers. Gay men tend not to be fathers (this is not being categorical of course, “tend”) as lesbians tend not to be mothers.

If the so-called gender pay gap were simply the influence of children upon earning patterns, as we largely think it is, then we would expect to see what we do see when looking at the earnings of non-hetero society. This does not prove we are correct of course, but it is supportive of our view.

They’re spouting rubbish about rubbish again

We’re really got to get ourselves a new group of people running our public services you know. The current lot seem to have missed the point of the whole exercise. For, at root, the entire exercise of politics and state power is really a method of deciding who empties the bins.

There are certain things that simply need to be done. There’s also a group of things that can be done individually, one of those that can be done by simple voluntary cooperation and another group of things that can only be done by some fairly strong compulsion. And those that are properly the province of that state, this government idea, as those that must both be done and can only be done with that compulsion. And taking out the rubbish is one of those things that is both. Yes, a free market would indeed deal with most of it but the public health benefits of not having those remaining piles of stinking ordure mean that there’s always going to be some state compulsion necessary.

At which point we get:

A town has been left overflowing with rubbish bags after binmen have refused to pick them up – because the sacks are the wrong colour.

Mountains of household waste is lining streets in Weymouth, Dorset, after residents were given blue bin bags as part of a new waste collection scheme rolled out in the town.

But some claim they did not receive the new blue sacks, and have continued to use the standard black ones – only for them to be left by the side of the road by binmen under strict orders not to take away the ‘unauthorised bags’.

Piles of rubbish bags have been mounting up in streets around the town for the past two weeks, to the anger of residents.

What?

The council-run Dorset Waste Partnership said it is ‘applying its policy’ to limit residents to one household rubbish bag a week in the hope they will recycle more.

The loons have taken over the asylum. We need to fire these people and get a new set.

Please note this is not about party politics and it’s also not about the “shortage of landfill2. We don’t have such a shortage. The country produces about the same amount of waste each year as the number of holes we dig each year for other reasons. The only shortage is in the licences to be allowed to put the rubbish into the holes we already have available.

What this is about is that we’ve simply got the wrong group of people ruling us and that needs to change. On the basis that government really is about deciding who take out the rubbish and if they can’t even manage that then….well, why don’t we try finding some people who can manage that minimal task?

D’ye see why we get puzzled about food banks?

We’ve the news today that it’s just appalling that a supermarket that runs a collection scheme for food banks should actually indicate, in its stores, which foods might be suitable for purchase to a food bank.

The Co-op has faced criticism on social media after a customer tweeted a picture of an own-brand grocery display touted as ‘ideal for the food bank’.

Dan Paris, a Scottish National Party activist, shared his picture of the promotion and remarked: ‘It’s easy to get used to these things but a shop advertising tinned food as “ideal for the food bank” has floored me.’

It led to a furious response from Twitter users who accused Co-op’s charitable appeal as a scheme for ‘pushing stuff customers won’t buy just to make a profit,’ as one put it.

Umm, what?

In response, Mr Paris explained he is himself a supporter of food banks.

He tweeted: ‘I’m sure this was done this with good intentions but I found it genuinely upsetting that food poverty has been normalised to this extent.

‘Nobody should be asked to buy food for the poor when they’re doing their weekly shop. That’s what the welfare state is for.’

We wouldn’t normally say this, that people should look to La Toynbee for actual information on anything but she did, on the same day, point out this:

As the Church of England report revealed, the most common reason for using food banks is benefit delay and “sanctions”.

The reason that we don’t want food banks to be a part of the welfare state is because they’re a reaction to the incompetence and or malevolence of the welfare state. It’s also worth reminding ourselves that the Trussell Trust says about itself that it started to take an interest in the issue back in 2000. when it was horrified to find out that there were people with no actual food in the house because of incompetence in the paying of benefits. This isn’t a new problem. and it’s not even entirely a problem with the simply incompetence of the State organs. Any system that tries to deal with tens of millions of tax and or benefit accounts simultaneously will screw up from time to time. And the sheer numbers just mean that at any one time some tens of thousands of people at least will be getting screwed. Which is rather why it seems like a very good idea to be using an entirely different system, operating in an entirely different manner, to be dealing with that problem.

All of which is entirely beside the basic moral point at issue here. What the heck’s wrong with private charity? Why does the solution only become sanctified when it is washed through the Holy Church of the taxing offices?