Monday, 9 July 2012

Poverty and wealth are two sides of the same coin

Abolition of poverty is a worthy aim, and the Welsh Government’s Action Plan for Tackling Poverty (available here) published a fortnight ago is clearly based on the best of intentions.  I wouldn’t disagree with any of the proposed actions in themselves, and given the limited powers available to the Welsh Government, it’s probably unrealistic to expect much more.
I was left a little uneasy by some of the references to people having ‘problems’ with which they needed assistance; not because we shouldn’t be helping people to overcome difficulties, but because of the implicit suggestion of dysfunctionality and fault.  Whilst there’s no doubt that some low-income families suffer from some of the problems referred to, so do some families in other income groups, and it’s that apparent association of dysfunctionality and poverty which left me uneasy.
The real question, though, is to what extent the measures in the plan, even if all implemented successfully, will actually reduce poverty.  Given that it’s fairly easy to improve the lot of those marginally below the line, it’s probable that any figures produced will show some improvement, but that may not reflect a significant improvement for the remainder.
The main reason for my doubt is that there is a difference between mitigating the effects of poverty and eliminating poverty itself, and it seemed to me that most of the actions proposed fall into the first category, not the second.  That doesn’t negate the value of the actions proposed, but it does lead me to challenge whether they will eliminate poverty or merely redistribute it.
Take educational attainment for instance.  There is a clear relationship between poverty and attainment, and improving the levels of attainment of the poorest will help to close that gap – or even eliminate it.  But even if every child attains the level of educational success needed for entry into higher education, the government’s other announcement last week of a cap on the number of university places means that the proportion actually receiving such an education will not increase.
And unless the balance between well-paid jobs and low-paid jobs in the economy changes, then the same number of people will still be employed in low-paid jobs.  There may be more mobility between income groups – but every opportunity for someone from a poor background to take a high-paid job means an equal ‘opportunity’ for someone from a high-income background to take a low-paid job.
What that in turn underlines is that any real attempt to tackle poverty has to deal with the levels of income and wealth inequality; the cake has to be shared more equally.  That’s outside the remit of the Welsh Government, of course.  But they don’t even seem to be acknowledging the problem.


You mean there's more??? said...

I think you have hit a nail on the head. The answer to creating a better society along a whole range of measures is to ignore poverty and concentrate on equality, greater equality is the better solution to social problems.


John said...

... to reduce poverty a first aim might be to create a just society, poverty might then begin to disappear.

Ioan said...

The definition of poverty - "that an income of half the national average indicates poverty" is a strange one.

1) It implies that if everyone's income doubled, the poverty rate stays the same.

2) If you only reduce the income of the average earner, "poverty" goes down.

3) If you gave an income of £1,000,000 to every one in the poverty bracket, the poverty rate would go up (a new set of people would drop into the poverty definition).

I could go on...

John Dixon said...

I agree with John about the need for creating a just society. The problem arises, of course, in defining what we mean by just. And I agree with YMTM that the solution to poverty lies in equality, in part at least. But 'just' and 'equal' are not necessarily the same thing, depending on one's viewpoint.

Would it be just, for instance, for everyone to get the same regardless of contribution made? Or is it just that rewards for contribution made vary so greatly that we have huge wealth alongside poverty within our society? And where to draw the line?

Ioan's point is a very valid one. As long as the measure being used for the elimination of poverty is a relative one (there is also an absolute measure defined by government, but they don't seem to refer to that one so often), then we can never eliminate poverty whilst income levels vary so much. That, in a sense, was the point of the post - wealth and poverty are different sides of the same coin.

Extremes of wealth push the average up and therefore increase relative poverty even if the absolute position of those concerned changes not one iota. A measure which defines poverty as being below x% of the average income - wherever x is set - can only bring everyone above that level (which is what I take 'elimination' to mean) if there is a simlar level above the average beyond which income cannot rise. That's a bit of an oversimplification of the mathematics, but in essence it's simple arithmetic.

Elimination of relative poverty depends on elimination of relative wealth. Politicians who talk about eliminating poverty without facing that are merely engaging in rhetoric. They are doomed to fail.