Appendix 1
"POVERTY LINES", GOVERNMENTAL MINIMUM
INCOME STANDARDS AND INCOME MAINTENANCE MEASURES
1. The distinction between empirical poverty
measures, derived from scientific research, and political MIS
(and politically-set income maintenance provisions) is shown in
table 1 appended. Empirical poverty measures are distinguished
from the whole range of other deprivations and social exclusions
by their causal correlation with low personal disposable incomes.
Many deprivations and exclusions are causally correlated with
low income ("The rich do not choose the life styles associated
with the lack of necessities": Mack and Lansley 1985 p 96)
even though not all are. To discover which social evils correlate
with income levels is a matter for statistics. To discover which
income-related social evils are caused by low income and at what
levels is a matter for social science.[19]
2. The transition from the findings of social
research to the potential setting of specific benefit rates has
often been misunderstood, especially in government, partly perhaps
because of the paradox that social science provides data which
are methodologically reliable (they express the range of probability
for poverty boundaries and clusters correlating with low incomes)
but do not give precise guidance in individual cases. By contrast,
government needs to construct precise benefit scales for application
in individual cases, but these may not be wholly scientifically
reliable in the terms of the research findings. The intermediate
step, which makes it possible for governments to provide a credible
basis for the tiered range of income maintenance provisions from
minimum wage to social assistance, is the use of a governmental
minimum income standard which reflects a defensible public view
of the income needed for the minimally adequate level of living
for some section of the population to achieve what society defines
as human decency, the ability to take part in society and avoid
shame (all terms drawn from the European Union recommendations
on this topic). This is then the comparator against which the
precise details of income maintenance benefit scales can be calibrated,
taking the duration of dependence into account.
"Poverty Lines", Governmental
Minimum Income Standards and Income Maintenance Measures
Table 1[20]:
"Poverty lines" and MIS
"Poverty lines" are best described
as the income levels or bands which are statistically found most
closely to approximate to the boundaries between:
(a) high probability of correlation between
high rates of complex socially defined deprivations and low incomes;
and
(b) low probability of correlation between
incomes and deprivations.
Poverty lines are scientific measures
of the minimum incomes individuals and households are discovered
to need in order to take part in the society in which they live
and to avoid what is defined as deprivation and exclusion in that
society.
There are broadly two kinds:
(1) empirical poverty lines, based
on statistical survey evidence:
(a) showing the minimum income levels
at which people in fact are able and do take part decently
in society and avoid deprivation, or
(b) showing what the population itself
reports would on average be just sufficient to "make
ends meet".
(2) prescriptive poverty lines, based
on experts' calculations of the minimum income which ought
to be sufficient for minimally decent participation as socially
defined if used according to the budgeted prescriptions
based on evidence of prevailing adequate living patterns.
Scientific research into poverty boundaries
reveals what that society's standards of adequacy are, irrespective
of their political implications.
Governmental Minimum Income Standards (MIS)
are political criteria of the adequacy of income levels
for some given minimum real level of living (for a given period
of time or indefinitely, of some section or all of the population)
embodied in or symbolised by a formal administrative instrument
or other construct.
MIS are based on political considerations
and there are several types, discussed in this report.
The standard of adequacy of MIS is primarily
a political reflection of that government's values, ideology
and electoral considerations.
Social assistance and other minimum income
benefits are based on political decisions about how much
government is willing to pay to people in certain categories.
Though social assistance is by definition designed
for the poor, its actual benefits may be demonstrably inadequate
to meet minimum income or other needs for social participation.
Not all the recipients of other minimum income benefits are categorised
as poor, nor is government's aim necessarily to provide a sufficient
income to combat poverty: it may be to help people maintain their
previous levels of living, or to support their own efforts to
get out of poverty.
The standard of adequacy of minimum income
maintenance benefits is primarily a political consideration
of feasibility and costs.
19 This need not be a matter for fine psychological
distinctions in explaining behaviour; it may be enough to see
that the choices of action open to people are limited by their
low incomes and can lead to what to them seems rationally chosen
behaviour which richer people might find irrational when wider
choices are available. To express frustration and alienation may
seem offensive to others, but it is not necessarily irrational. Back
20
Tables extracted from: John Veit-Wilson [1998], Setting adequacy
standards: How governments define minimum incomes, The Policy
Press, Bristol. ISBN: 1-86134-072-9. Back
| 
