From the moment Frank Field raised doubts about the validity of relative poverty measures, the outrage industry has been up in arms against him.
The poverty enquiry which Field will conduct for the coalition has not even begun yet, but according to Donny Dorling of Sheffield University, Field’s venture shows that David Cameron “clearly does not want a redistribution of the money, the land, the work, the educational resources and the ‘opportunities’ that the rich have expropriated from the poor over the past three decades.”
I have written a number of posts criticising the concept of “relative poverty”. Let me, however, make a conditional defence of it. It is sometimes claimed that researchers focusing on this measure “confuse” inequality with poverty. They don’t. They subscribe to a specific set of highly restrictive assumptions, under which income inequality means social exclusion, and social exclusion means poverty. So under their assumptions, inequality is poverty, and there is nothing counterintuitive about the finding that Luxembourg has a higher poverty rate than Hungary, Slovakia, Slovenia and the Czech Republic.
The problem with relative rates is that when they are quoted outside of research circles, they are seldom, if ever, presented in this way – as a figure which makes sense under very specific assumptions, which you can accept or reject. What you usually get is a conflation of the rate produced by one poverty indicator with the interpretation belonging to a different one. Witness Dorling:
“…European Union researchers announced that 23% of children in the UK lived in a household in poverty, and that the UK ranked seventh worst out of 27 EU countries by the measure Field would like to abolish. Only in poorer countries, such as Romania and Bulgaria, are a higher proportion of children living in poverty.”
The latter sentence insinuates that the poverty rate should be inversely related to a country’s overall level of prosperity. This would be a perfectly valid claim for an indicator of material deprivation, but not for relative poverty, which has nothing to do with overall prosperity.
Dorling is not an exception. End Child Poverty informs us that “4 million children – one in three – are currently living in poverty in the UK [...]. This is a shocking figure given the wealth of our nation.” The UK branch of Oxfam claims that “The UK is the fifth richest country in the world. [...] Yet this has not benefited the poorest in society.”
This jumbling of poverty figures and interpretations is unfortunate, because child poverty does exist in the UK. But we would be better served with a contest in producing the most sensible policy recommendations, instead of a contest in producing the most catastrophic figures.