Save the Children has recently been quoted regarding their findings on “severe child poverty”, which is rising. Indeed, it was increasing before the recession and, according to the charity’s estimate, 1.7m children are affected.
As usual, one could debate forever and a day the meaning of a term such as “severe child poverty”. Anti-poverty initiatives have a preference for strong language. This puts some critics off, because they believe terms invoking images of extreme hardship should be reserved for describing the type of misery one finds in the Third World, or in past centuries. For the campaigners this is tantamount to “denying poverty”.
So let’s leave semantic issues completely aside for a moment: I believe Save the Children’s severe child poverty (SCP) indicator makes a lot of sense, and their accompanying policy paper provides a valuable contribution. They identify worklessness, disability and lack of savings as risk factors, and find a geographical concentration of child poverty in London. These findings deviate somewhat from the ones provided by the more common indicators of relative and absolute poverty.
They do so because SCP is a combined measure of consumption and income. It identifies a household as poor when it lacks at least two items out of a pre-defined basket of essential goods. Additionally, income must be below 50% of the contemporary median.
SCP can identify a number of things which income-based indicators miss. Firstly, it includes information about income dynamics. If you lose your income today, you will not suddenly be poor tomorrow. Your fridge, computer and furniture will not suddenly evaporate. Also, while worklessness may not always compare so badly with low-paid work on a snapshot measure, over time it does. Maybe that is why the paper makes a strong case for poor parents’ (re-)integration into the labour market, instead of simply calling for higher unemployment benefits. Secondly, SCP captures regional price differences. It is not misled by the higher nominal incomes in the South East. Thirdly, SCP can reflect unobservable variables, which can make households with identical incomes enjoy vastly different living standards.
The only criticism I have is that there seems to be a certain knee-jerk reaction to call on the government for “urgent action”. Is the lack of progress in recent years not a reason to suspect that the state-centric approach to poverty alleviation has met its limits?