Types of poverty
Philip Alston, the UN’s rapporteur on extreme poverty and human rights, reported that “For almost one in every two children to be poor in twenty-first century Britain is not just a disgrace, but a social calamity and an economic disaster, all rolled into one.”
To most UK people, the disgrace and the calamity is that such a highly-placed UN official should peddle such nonsense, nonsense that simple inspection shows is untrue. The obvious explanation is that he is using the word poverty in a way that is unrelated to living standards. And the obvious question concerns what he is using it to mean.
Absolute poverty means being unable to meet basic survival needs such as food, clean water, shelter, and clothing. It is defined internationally against a fixed threshold such as the World Bank's $2.15 a day, regardless of where someone lives.
Not having enough food, clothing or shelter and unable to afford education, or healthcare is how much of the world has lived for millions of years. Even for those on the borderline, life is precarious. A bad harvest, storms, earthquakes, can wipe them out. Only recently have we found how to rise above this. The industrial revolution and free market capitalism have created unprecedented wealth. They have enabled us to afford medical advances, sanitation, improved diet, and access to opportunities for advancement. We have worked to relieve absolute poverty, and great advances have been made by admitting people in poorer countries into international markets.
Very different is what is called relative poverty, often defined as having less than 60% of median income. This is a measure of inequality rather than poverty. Some people are worth more financially, even if not morally. They earn more by performing tasks of greater economic value to their fellow men and women. If you make their incomes equal, you remove the financial incentive to provide goods and services to others.
People can produce statistics that purport to show that a tiny proportion own most of the wealth, and talk about asset poverty. Often these simply do not count the assets ordinary people hold, such as the right to free education, free healthcare, and a retirement pension, all of which have value as assets even though they are not counted. Often they do not include the right to live in below-cost housing. Usually there is no age factoring. Many people have negative wealth when young, and become wealthier as they grow older. This is presented as different sets of people when it is the same person at different ages. Most recent graduates have negative assets running into tens of thousands of pounds.
Water poverty is a condition where households struggle to afford essential water and sewerage services, typically defined as spending over 3% to 5% of disposable income on these bills.
A household is said to be in fuel poverty if it needs to spend more than 10% of its income on energy costs.
Some poverty is transient. It can arise from short-term hardship caused by job loss, illness, divorce, or economic shocks. People move in and out of this type, and recovery is possible with the right support. On the other hand, there is long-term or lifelong deprivation, often passed across generations. It can be deeply entrenched and harder to escape from because of structural barriers such as a lack of education or geographic isolation.
Urban poverty refers to the kind sometimes experienced in cities, often characterized by overcrowded slums, high living costs, precarious informal work, and poor sanitation despite proximity to wealth. Similarly, people talk of rural poverty in countryside areas, typically linked to lack of infrastructure, limited access to healthcare and education. Internationally if often refers to dependence on subsistence farming, and geographic remoteness.
What most of these incidences labelled as poverty have in common, is a lack of money. They are not short of cheap water or sewage, or cheap energy or cheap housing. In most cases they are short of money. This is true of absolute poverty, but not of relative poverty. A person in the UK might have less that 60% of the national average income, yet is among the world’s richest 10%.
This is a time to relabel poverty to mean bring poor. It does not mean being unequal, but not having enough to get by. Along with many others, I don’t favour the pursuit of equality, but I do favour extending opportunity as far as we can, and of alleviating the poverty that limits life’s chances.
Madsen Pirie