Trussell Trust is remarkably confused here
We don’t think much of the way poverty is measured these days - it confuses inequality with poverty - and most of the alternatives suggested are worse. As here:
It defined a family as facing hunger and hardship if it was more than 25% below a poverty line set by the Social Metrics Commission, which measures a household’s savings and income.
The Social Metrics Commission measure is of inequality, not poverty. As described here. It’s just starting from a higher point than the more usual less than 60% of median household income one.
We, ourselves, think that a useful measure of whether a household faces hunger or not would be, well, can they afford food or not? Which isn’t the thing being measured in the slightest. Which is unfortunate given that the cost of food relative to real incomes is the lowest it has been since that invention of agriculture thing. But then this is why poverty never is measured as actual poverty these days. If we all did admit and agree (as with Babs Castle all those decades ago) that poverty had actually been conquered then the emotional pull of shrieks that we must disposses the rich would falter.
But Trussell manages to be even worse than just that. The claim is that poverty means the economy is smaller than it could be. Well, OK, unemployment would certainly have that effect. But then they go on to insist that benefits should rise to beat that problem. Which isn’t how it works at all:
It said abolishing the two-child limit would lift 670,000 people out of facing hunger and hardship, including 470,000 children. This would lead to a reduction in costs to the economy, public services and the exchequer of more than £3bn.
While calling for an “urgent rethink” on planned cuts to disability benefits, it said there was also a need to update universal credit so that it protected more people from hunger and hardship through an “essentials guarantee” that could lift more than 2 million people out of deep poverty.
No, that’s one of those - to use the colloquialism - arse about tit things. People not working a cost? Sure, their labour could have been doing something, if it isn’t we’re all collectively poorer. There’s a tax loss to their not doing anything? Sure - and a benefits bill too. All of that’s fine.
But the assumption is then that increasing benefits will put more people to work. Which is absurd - have these people never heard of the reservation wage?
Now, it might be a little extreme to suggest that none of the young people will get out of bed for less than £40,000 a year. But it’s quite obvious that many people are indeed economically rational. That they’ll only get out of bed to go to work if doing so brings them more reward than not having to do so. At which point increasing benefit levels is not going to increase the number of people going to work, is it? Thus increasing benefit levels will not reduce the loss from work not being done, increase the tax revenue from it being done. Nor, obviously, will increasing benefit levels reduce the benefits bill.
Now, true, we do tend to be more than a tad ideologically differentfrom the Trussell Trust. But even so it’s not too much to ask them to think, is it?
Tim Worstall