Poverty and inequality

[Aught3]

I've recently been wondering about the use of 'poverty' and 'inequality' in political discourse. Sometimes it seems as if the two are being conflated for political purposes. I tend to think of poverty as implying a lack of the basic services available in a particular economy. In New Zealand for example, someone who went without sufficient nutrition, access to education, basic healthcare, etc would be someone I would consider in poverty.

However, the ways of measuring poverty are based on the median wage which is really a way of measuring inequality. This may approximate the people living in poverty but it could easily under- or over-estimate the actually number of people doing without adequate shelter, nutrition, and education. This reliance on inequality as a proxy for poverty also sees solutions proposed that focus on the metrics (i.e., raising income levels across the board) rather than on solutions that actually address the main negative effects of poverty which are mostly around poor health outcomes.

In addition, inequality has many negative consequences on a society in itself. For example, gated communities of wealthy individuals cutting themselves off from society decreasing diversity and allowing public services to decay. But these outcomes get lost in conversations about poverty where the inequality metrics can be dismissed as not relevant to the discussion. It might be possible that the conflation of poverty and inequality is convenient for those who wish to nothing about both.

Looking at graphs of wealth distribution, at least from the United States it seems the three classes of poor, middle, and rich could be more accurately drawn as the poor, the rich, and the ultra-rich. Perhaps the so-called middle class scared of losing its status above the poverty line prefers to have that line drawn on the basis of 60% median household income. So no matter how badly they are doing financially, they are at least better off than the bottom 40%. The ultra-rich and political players also benefit by distracting discussion from the harm of vast inequality and redirecting this concern to a discussion on poverty, only to dismiss concerns about poverty being based on faulty metrics.

Perhaps the use of poverty and inequality need to be sharply delineated so that legitimate concerns are not deflected so easily by those who benefit from the current situation. I also want to see a proper measure of poverty in different societies and for it to be talked about more in political discussions and news articles.

The poor complain, they always do, but that's just idle chatter.
Our system brings rewards to all, at least to all who matter.

 

[PAB]

The way i understand it is there are two types of classified poverty. Relative and Absolute. What you seem to think of as poverty which most people do is absolute i.e. not being able to feed, cloth and have shelter with lack of health care etc. Whereas the method of measurement of below the median wage as an indicator of poverty would , i assume, be identifying relative poverty.
Wikipedia seems to confirm this

Relative poverty views poverty as socially defined and dependent on social context, hence relative poverty is a measure of income inequality. Usually, relative poverty is measured as the percentage of population with income less than some fixed proportion of median income. There are several other different income inequality metrics, for example the Gini coefficient or the Theil Index.

For me then there is no contradiction or antagonism between inequality and poverty. Rather poverty is a qualitative condition of inequality. And actually in my experience of rhetoric in British politics i would argue it is not the "conflation" of inequality and poverty which is used for those who want to do nothing, but rather the argument that absolute poverty is only poverty and therefore very little to nothing needs to be done, it is seen as an anomaly not as something endemic in our current society (as for those who are poor they are told to work harder).

Personally i don't have a problem with the relative indicator of poverty, because standards of living vary from country to country.

When you are getting to this

This reliance on inequality as a proxy for poverty also sees solutions proposed that focus on the metrics (i.e., raising income levels across the board) rather than on solutions that actually address the main negative effects of poverty which are mostly around poor health outcomes.

I think you are right that solutions are not about simply raising income levels. But i am not sure what you mean by addressing the main negative effect being poor health outcomes ?
As far as I'm concerned the solution to poverty is eradication of poverty, which in my opinion is impossible without global socialism.

And since I've mentioned the "S" word....

That was a great video you linked. But being a socialist who has talked to hundreds of socialists of various different backgrounds and political variations (from Stalinist, to Trotskyists , anarchists and liberation theologists) i have never came across any proposal or ideas of income equalization like what is shown in that graph. In fact i have only came across A pamphlet by Marx (i think it is value price and profit) who argues against someone in his early organization "The International Workingmen's Association" against the ideas of equal pay for everyone, because as Marx argues that would be in fact unequal because people are unequal and there circumstances differ. i.e. a single parent with 4 children needs more support and resources than a single man or woman. What socialism would be on that graph would be the removal of the top 20% due to nationalization of essential services i.e. banks and financial institutions, hospitals, schools and universities, natural resources, in summary private ownership of the means of production and services. In which the surplus revenue not required for re-investment (currently used for bonuses and irresponsible pay packets i.e. "incentive") would be used to provide public services ranging from free healthcare, free and subsidized housing, free education and higher education etc. Which would at the very least abolish absolute poverty.

 

[Aught3]

Thanks for the thoughtful reply PAB.

First a clarifying point:
When I said "actually address the main negative effects of poverty which are mostly around poor health outcomes" I meant that absolute poverty is a bad thing mostly because of the negative health impact it has on those who experience it. For example, not getting enough food leads to malnutrition. Having poor quality and over-crowded shelter leads to an increase in infection rates, etc. While there are other reasons absolute poverty is bad for the individuals who experience it, I think that health consequences are the primary problem to be highlighted.

I suppose what I am trying to do is approach this question in a bi-partisan manner and find a way for clear communication between the left and right political spheres. I think someone who favours capitalist-style solutions could fairly claim that by bundling inequality into the definition of poverty you presuppose the kinds of answers to poverty that are acceptable. Thereby the right-leaning ideologue can dismiss all concerns about poverty. I think that both poverty and inequality are important but I also want to make sure the moral force around absolute poverty is maintained and it seems to be diluted by a conflation with relative poverty.

In Britain if there is not the deprivation-type absolute poverty then we might be talking about different political climates. In New Zealand that kind of poverty does exist and not much is done about it but I always hear it brought up in terms of inequality which make it too easy to dismiss. I want to separate the two ideas so the more harmful aspect of poverty can be dealt with but I can understand how in different circumstances relative poverty might be the more useful term in order to achieve certain political goals.

 

[PAB]

Well Aught3 you seem to be determined to try and do something about poverty in New Zealand so i wish the best of luck to you.

When you say that the right ideologue will/ can dismiss poverty if it is seen in terms of inequality, could you expand on this either hypothetically or from your experience. And what are the presuppositions created as answers to poverty when inequality is factored in to the definition of poverty?

As i expressed before inequality and poverty are fundamentally linked in my view. What is your definition of poverty if it is not linked to inequality ?
The concern that i have is that i believe poverty is a qualitative condition it is i.e. being extremely poor (absolute) or (relative) unacceptably poor, and that this condition is not chosen like that of religious monks but rather forced upon people who are trapped in those conditions. And that in general the predominant cause of poverty is the inequality of resources and a global economic system that is systematically unequal (i.e. that nice video you posted expresses a global inequality) (+ factors such as overpopulation are a cause but are not as i see it the dominant one, rather they add fuel to the fire and add strain to the weaker economies.).....So by redefining poverty away from inequalities due to right wing pressure the benefit may be some success in collaborative efforts to put some structures in place to alleviate some of the worst cases of impoverishment but at the loss of defining poverty at its root cause it takes attention away from the real underlying causes. And as i see it ground would be lost to simply treating the symptoms rather than the disease itself.
(But then again i have a very simple relationship with right wing ideology and party's, and that is absolute unwavering opposition)

Could you perhaps forward some links which you think accurately portrays the conditions in New Zealand regarding poverty and the political debate on it ?

 

[PAB]

Although it is specifically concerning the EU this is an interesting read
http://www.eapn.eu/images/docs/povertyexplainer_en.pdf

Its focus as it states is primarily on relative poverty as absolute poverty for Europe is almost non existent i.e. it mentions some people struggling in romania as an exception. However im sure the thousands of homeless in London alone will be willing to debate that, not to mention the illegal immigrants who are forced to share rooms with many many others sleep in "converted" sheds and meat freezers etc.

Anyway on the topic of inequality this document puts it thus ;

Unlike poverty, which concentrates on the situation of those at the bottom of
society, inequality shows how resources are distributed across the whole society.
This gives a picture of the difference between average income, and what poor
and rich people earn, and highlights how well different Member States
redistribute or share the income they produce.
Data on inequality is vital when considering poverty, as the overall distribution of
resources in a country affects the extent and depth of poverty. This is particularly
important when the debate at EU level is generally focussed on relative poverty
and where the poverty levels are calculated in relation to average incomes.
Generally countries with high levels of inequality are also likely to have high
levels of poverty and those with lower levels of inequality are likely to have lower
levels of poverty. This shows that the problem of poverty is fundamentally linked

Poverty and Wealth have to be studied together. In the EU inequality is
studied by looking at the distribution of income. However, this is only part of
the picture. Another key element in inequality is the study of wealth: where it
comes from, who has it, and how society redistributes it. An important area is
the extent to which people own capital and assets of one sort or another – for
example, property, shares and investments. However, there is a lack of
comparable data across Europe on ownership of capital and assets.
Unfortunately depending on income distribution only gives a partial picture
and may well lead to a significant underestimation of inequality in some
Member States.

The overall persistent high level of poverty in the EU
suggest that poverty is primarily the consequence of the way society is
organized and resources are allocated

and regarding the political arena this is worth consideration........

The least unequal societies in Europe tend to have the lowest
levels of poverty. This is primarily because these Governments chooses to give
priority to ensuring adequate minimum income levels and ensuring good access
to services, through the social protection system and through guaranteeing
minimum wage levels. They are usually the most effective at redistributing
wealth through the tax and other systems. This means that the decisions over
how to eradicate poverty in the end are political choices about the kind of society
we want.

Using the EU to support my arguments has made me uneasy and unsure of reality ,so i'm going to go watch some Glenn Beck to remind me exactly what is wrong in the world.

 

[PAB]

http://www.guardian.co.uk/society/2013/mar/17/aid-trade-reduce-acute-poverty

So according to a new "multidimensional" measure cooked up in Oxford University it seems that extreme poverty is being reduced in many countries

"The world is witnessing a epochal 'global rebalancing' with higher growth in at least 40 poor countries helping lift hundreds of millions out of poverty and into a new 'global middle class'.

Funnily enough this is a down to a report from the UN but - " poverty could increase by up to 3 billion by 2050 unless urgent action is taken to tackle environmental challenges, a major UN report warned on Thursday."....

 

[ArthurWilborn]

There's a key assumption I think I'm missing here. Some people have more money then others, ok. How does people having more money hurt the people who have less money, exactly?

 

[Aught3]

There's a key assumption I think I'm missing here. Some people have more money then others, ok. How does people having more money hurt the people who have less money, exactly?

I gave an example in my OP but taking from Wikipedia more economically unequal societies tend to have:

Higher rates of health problems (more obesity, mental illness, and infant mortality)
Higher rates of social problems (more homicides, incarcerations, and drug use)
Lower rates of social goods (lower life expectancy, educational performance, trust, social mobility, and patents)
Lower levels of economic utility
Lower economic growth
Less social cohesion
Higher crime rates
Less civil participation
Less cultural participation

So that's why it's being taken as obvious that inequality is detrimental, although this thread isn't really about inequality but the difference between poverty and inequality.

 

[Aught3]

Coming back and reading this thread six months after having started it, I have to say I feel pretty justified in my initial concern that poverty and inequality were being deliberately mixed up in order to avoid talk and action about both.

This editorial from the NZ herald contains some choice explanation around the current government's unwillingness to even acknowledge the problem on absolute poverty in New Zealand.

Some of the statements from the minister are: that household income rates (i.e. inequality) has gotten no worse in the last three years so we don't need to talk more about it and that there is no "one measure" of poverty.

This is exactly the issue I was identifying. Because there is no official way to measure poverty any concerns raised can be dismissed with a simple sound bite. When the issue is pressed, ministers fall back to talk about income levels which are steady enough to give the illusion of stability.

In fact, when statistics on outcomes related to poverty are examined they show the situation is getting worse. A 12% increase in hospital admissions for children and rising emotional/physical abuse of children (previously reported by the government as a decrease in abuse!)

When Dr Russell Wills (Children's Commissioner) asked the government for funding to create an official measurement of child poverty and its impact on health and social wellbeing he was turned down. It seems hiding the problem is preferable to understanding it, at least for this government. Fortunately, he didn't give up and got his funding from a charitable trust to set up the measuring and monitoring system.

My prediction is a big attack by the government on the new report due out this week. I hope that it gets a lot of coverage in the media and the ministers/prime minister get to show off just how callously they treat our most vulnerable citizens. Personally, I'm extremely disgusted with my current government. I don't vote for National in elections but they seem so much worse this time around than in the past. I want John Key and his crew gone pronto. The next election can't come soon enough.

 

[Dragan Glas]

Greetings,

I think one should also be careful not to be confused by the term "poverty" - there are two kinds of poverty: dynamic and static.

Dynamic poverty is where someone may fall on hard times - into poverty - but then picks themself up and makes money again.

Static poverty is "permanent" - ie, generational - and is what is referred to as "real" poverty.

It's this latter form which is the real problem, is of concern and needs to be addressed.

Kindest regards,

James

 

[Aught3]

I pretty much agree. I'm not sure exactly what 'time limit' I would put on the difference between poverty and real poverty but I could see how a few months of hardship wouldn't really count.

That may be why the report focuses on child poverty, which is generational by definition.

As it turned out, there was
- 25% of NZ children in relative poverty
- 22% in material deprivation
- 10% facing severe hardship

It looks like relative poverty is a pretty decent indicator of absolute poverty which I found interesting.