Memorandum submitted by Professor John
Veit-Wilson, University of Newcastle upon Tyne
1. This submission addresses the first question
listed on the invitation to submit evidence dated 22 May 2006,
"What is poverty?" It does so because the term "poverty"
is used in so many different ways—diffuse, broad, contested,
contradictory and varying according to who is using the term and
for what purposes. The Committee will be offered many preferred
answers to the question, and may therefore be helped by a systematic
introduction to the wide range of meanings and uses it encounters,
to clarify and explain them. The following notes, on Poverty
and on Minimum Income Standards, are entries which I was
invited to write for the International Encyclopaedia of Social
Policy (Routledge 2006). The entries were peer-reviewed by
an international editorial team of experts and judged to offer
authoritative introductions to the meanings of the terms. (If
the notes below are quoted, the citation should be to volume 2
of the Encyclopaedia.)
2. The meanings and measures used by social
scientists are reliable for their purposes but may not offer the
precise answers which politicians and administrators want for
guidance in setting levels for benefits, tax credits or the minimum
wage. These guidelines are better described as governmental minimum
income standards (MIS). Although my own research found 10 countries
which did have MIS (Setting Adequacy Standards: how governments
define minimum incomes, Bristol: The Policy Press, 1998),
no UK government has ever used one to set benefit rates. However,
I should strongly recommend their use, and the Joseph Rowntree
Foundation is currently sponsoring research to establish one.
I shall be glad to give further evidence to the Committee if asked.
POVERTY
People are said to be in poverty when they
live below a standard which their society recognises as a reasonable
minimum. Poverty is a contested concept, and there is no agreement
on how to define the word more precisely. Perceptions, contexts,
meanings and usages differ between societies and observers, and
change over time. The word is used indiscriminately for the concepts,
definitions, signs or experiences of the condition, expressed
by some as the characteristics of other people suffering it ("the
poor") and by poor people in terms of their experience. It
is used for disparate measurement methods as well as for their
findings. It is often identified in the condition of lacking resources,
necessities or opportunities for participation, or suffering damage
to human dignity or being socially excluded, as well as their
deleterious concomitants and consequences. Many incompatible discourses
are separately but simultaneously used in discussing its forms,
scale, causes, consequences and cures, within and between industrialised
societies and developing nations, often with little attempt to
integrate the approaches.
PERCEPTIONS OF
POVERTY
Perceptions precede conceptualisation. The accumulated
knowledge about poverty by those who suffer and those who study
it is immense but fragmented. Most of the political, philanthropic
and academic literature on poverty has been written by those who
do not experience it to illustrate their perspective; those who
suffer poverty may offer different meanings. The political agenda
for social or economic management determines which aspects of
poverty are prioritised, often contrary to the aspects which those
experiencing poverty or researching it see as the most salient.
The absence of agreement on poverty concepts, measures or policies
reflects structural conflicts in all countries and globally. As
those who experience deprivation achieve greater political power,
their perspectives may influence the concepts, measures and outcomes
more. The lack of power to influence public images and perceptions
of poverty is among the meanings of the term.
Public perceptions are distorted by partial
knowledge, manipulated imagery and political expediency. When
poverty is perceived as not simply a personal trouble but a social
problem, proposed solutions have included behavioural change not
only by those suffering poverty but by those who hold power over
the tangible and intangible resources needed to prevent it, as
well as economic, political and social structural change. Social
policy responses to poverty demand careful delimitation of what
is problematic within politically feasible parameters, but such
analyses and solutions are both strongly contested. Differing
perspectives on the experience are implicitly embedded in the
concepts used.
CONCEPTS OF
POVERTY
The concepts of poverty which underlie the various
usages refer to some people, individually or collectively, experiencing
conditions of life or social relations which fall below some kind
of minimum level needed in order to experience being, and to be
treated as, an autonomous person with full capacity to participate
in society. Poverty is commonly conceived as those deprivations
or unequal relations caused by lack of material resources, but
Amartya Sen's conceptualisation used the term capability to focus
on the activities needed for participation rather than the passive
resources alone. Some loose usages do not distinguish the reasons
why people fail to attain minimum living standards, and include
other causes of social exclusion, provoking disagreement over
boundaries and overlap between the politically expedient uses
of the terms poverty or exclusion.
The concept of poverty may not carry the same
connotations in different languages and cultures. In English there
are many ambiguities. Concepts of the condition are often confused
with the essence of the characteristics of those suffering from
it, or with definitions derived from measurement techniques. In
The International Glossary of Poverty (London: Zed Books
1999) Paul Spicker identified eleven clusters of meanings in late
twentieth century literature, three of which referred to material
conditions (inadequate level of living, unmet need, multiple deprivation),
three to economic position (lack of resources, inequality of resources,
class) and four to social position (lack of entitlements, lack
of security, dependency and exclusion). All can be found, though
not all congruently, in the seven discourses identified by John
Veit-Wilson in use in the 1990s among government policy-makers
in 10 countries. Each discourse packaged the poverty concept with
its manifestations and appropriate measures in a paradigmatic
analysis and vocabulary effecting closure on other competing discourses.
Three were asocially abstracted, expressing poverty in terms of
a legal status, a theoretical economic model, or a statistical
position on an income distribution. Four discourses were humanistic,
referring to persons and behaviours. Of these, one was structural:
the consequence of an unequal distribution of power over resources
through time created the need to ensure that no one's level of
living fell below the standards acceptable to society in general.
The other three covered poverty as a set of deviant behaviours,
as life-experiences too divergent from the acceptable average,
and as social exclusion.
The accounts given by those experiencing enforced
poverty often conceptualise it in psychological terms, feelings
of powerlessness and violation of human integrity and dignity,
which are also found in other conditions besides poverty. There
is much disagreement around the wide variety of terms used to
illustrate these abstractions, and they must also be distinguished
from voluntarily adopted material poverty, eg for religious reasons.
In the 1960s W G Runciman described as "relative deprivation"
people's tendency to evaluate their situation by comparison with
others and over time. Later research suggested that the greater
the degree of social inequality, the greater the symptoms and
expressions of physical and social malaise, which suggests connections
between social inequalities and poverty. The concepts of human
suffering or social problems imply imperatives to action, but
policy option choices vary widely according to the perspectives
chosen. Some poverties are functional to maintaining the comforts
of the non-poor and therefore poverty abolition is not necessarily
a universal goal.
IDENTIFIERS
The signs by which the existence of poverty
is identified are often confused with definitions or measures.
Traditionally they included a visibly deprived lifestyle and feelings
of exclusion and degradation. Potential identifiers include income
loss risk situations and other causes in marketised societies
such as having disposable resources below levels needed to avoid
poverty. The condition of lack of resources and its consequences
may also be indicated by signs including nutritional and health
deficiencies, lack of socially-defined necessities and participatory
experiences, inadequate housing and other environmental deficiencies.
Identifiers are not identical with social indicators
(statistical markers for measuring change) though some identifiers
are used as indicators. The UN's Copenhagen Declaration
of 1995 described what it saw as poverty, and "absolute"
poverty within it, in terms of identifiers, though it is often
called a definition.
DEFINITIONS
Poverty definitions are precise formulations
to distinguish it from non-poverty, encapsulating the concept
in terms of its explanatory paradigm and its historical and cultural
context. They therefore vary as widely as the concepts and incorporate
the perspectives of those who express them. Common to most definitions
is an idea of lack of resources as the cause or the condition
of inability to meet minimum standards. Similar conditions and
consequences may derive from other causes, but they are rarely
then defined as poverty.
Definitions can be normative (also known as
prescriptive or stipulative) or empirical. Normative definitions
prescribe adequacy criteria for the population. Empirical definitions
derive their criteria from the population surveyed. Not all relative
definitions are empirically based: income inequality definitions
imply normative standards.
Lifestyle and status. Until the 20th
century, if the non-poor defined poverty at all, it was normatively
as the conditions in which much of the urban and rural working
population ("the poor") lived, or as poor people's dependency
status as paupers. The social problem was expressed as poverty's
extreme and visible manifestations: squalid living conditions,
disreputable and criminal behaviour, precarious social and economic
marginality, and threats to social order from an "underclass".
"Absolute" definitions. Attempts
in industrial societies to discover income levels for economic
efficiency led to normative definitions of poverty as being incomes
insufficient to meet what were believed to be absolutely minimal
physiological subsistence needs (eg Seebohm Rowntree's "primary
poverty" level, designed to reveal income inadequacy). Subsequent
demands for social protection policies led to definitions of poverty
as incomes for a bare minimum of typical working class expenditures
(eg the "Living Wage" or Rowntree's "Human Needs
of Labour" standard). Rowntree's "secondary poverty"
was not defined in income terms: it was a description of people
living in identifiably poverty-stricken conditions but with incomes
above the "primary poverty" level.
Relative definitions. Sociologists such
as Peter Townsend pointed out that all conceivable definitions
of poverty, including those described as absolute, were relative
to the current normative standards of a society and could be defined
only in terms of contextually relevant resources insufficient
to meet empirical evidence of conventional minimum standards of
participatory life.
Income inequality. Normative econometric
or statistical inequality definitions of poverty as incomes below
a percentile on the income distribution scales are also called
relative, but this is purely in terms of the statistical criterion,
not the minimum adequacy standards. Such definitions imply that
poverty exists only as a minority experience; they fail to allow
for sociological research findings that under conditions of rapid
social change and economic decline a majority of a population
can experience poverty according to its own definition. A simple
version defines poverty as the condition of those with, for instance,
the lowest fifth or tenth of incomes. As such a proportion inevitably
exists in any distribution, this "poverty" cannot be
abolished. Another common version defines poverty as the condition
of those with incomes below a percentage of mean or median income.
Such "poverty" could be abolished if incomes were made
more equal so that no-one fell below the chosen percentile.
Exclusion. Under ideologically driven
influences in the 1970s, definitions of poverty were developed
which express it as a lack of tangible and intangible resources
which excludes people from the minimum acceptable way of life
in their society, or from other forms of social participation.
The process can be circular, since social exclusion may deprive
people of necessary resources. Market exclusion implies lack of
money to enter it, but this is valid only for marketed necessities.
Not all those in poverty are socially excluded, nor are all those
identified as socially excluded to be found among the poor.
MEASURES AND
POVERTY LINES
No one measure can capture all aspects of poverty.
The variety of identifiers and definitions generate their related
measures, each embodying the values and perspectives of those
who construct them. All embody some notion of deficit but the
measures in use are rarely explicit about their standards of minimal
adequacy. As Veit-Wilson emphasised, every claim of adequacy must
be tested against the four questions—adequate for what,
for how long, for whom, and from whose perspective—each
of which elicits different answers from different, often unvoiced,
premises. Similarly, the variety of purposes for which poverty
measurements are needed generate diverse instruments, often inappropriate
for other uses. What is measurable (for example income inequality)
sometimes becomes defined as poverty, without acknowledgement
of the limitations of that measure.
Measures may be direct (relating to criteria
of minimally adequate levels of living or social relationships)
or indirect (using the incomes and other resources needed as proxies
for the minimum level of living). They may be based on normative
standards or may be derived empirically from the populations surveyed
or affected. Measures commonly relate to individuals or households.
Since surveys generally study households, measures of individuals
in income poverty adjust household data for the size and composition
of the household, in terms of the age and sex of its members.
Children's income needs are related to those of adults by using
equivalence scales.
Poverty lines are those direct or proxy
measures which produce an income threshold or cut-off which can
be used for quantitative measurement of individual or household
incomes. Qualitative measures of the experience of poverty are
direct but often neglected because they are difficult to use statistically,
though they can be used to identify people in poverty.
Budget or "shopping basket" measures
calculate the total cost of all the purchasable components
of any specified standard of living over a given period of time.
The total cash cost, adjusted for tax and other relevant deductions,
is then used as an income proxy for the minimally adequate or
other living standard. The components may be chosen normatively
or based on empirical evidence of customary living patterns to
reflect the chosen standard directly.
Budget measures were the oldest systematic attempts
to construct a poverty measure. Developed in the late 19th century,
they were first used normatively to calculate the cost of what
was assumed to be minimum subsistence, but subsequently augmented
versions were widely used to count the numbers living in poverty
and to provide rationalisations for minimum wage and social assistance
rates. By the end of the twentieth century, budget standards based
on empirical evidence of actual patterns of expenditure at various
levels, and on consensual agreement on their components, were
developed as criteria of income adequacy.
A hybrid variant of the budget method is based
on Ernst Engel's observation that as incomes rise the proportion
spent on food decreases. The cost of a minimum dietary is calculated
and multiplied by the same proportion as food expenditure in the
average household's outgoings, on the assumption that this relationship
is meaningful. The US "Orshansky" poverty line, used
both for counting and as a guide to income maintenance scales,
was based in 1965 on a sparse version of this proxy approach,
but was subsequently updated only in step with inflation rather
than changes in either the minimum dietary or the average food
share of expenditure.
Deprivation indicator measures survey
samples of the population to discover what on average they see
as the necessities and experiences which no one should be without.
Further survey questions establish which households lack the items,
whether this is by choice or (if they are marketed) enforced by
insufficient income, and their income levels. In this direct approach,
a poverty line can then be derived statistically from the point
on the income scale where there is a clear correlation between
low income and multiple deprivations.
Public opinion or attitudinal measures are
indirect. Some surveys of public attitudes since the 1930s have
included questions on the minimum incomes respondents believe
their households need. The questions themselves, their assumptions
and the statistical methods used to process them vary widely and
have been refined since they were first used, but questions remain
over the accuracy of such subjective estimates, and over the value
of international comparisons where the costs of marketed necessities
(such as health services or child care) vary greatly between countries.
Statistical measures: three approaches
derive so-called poverty measures from national income statistics.
They cannot be described as either direct or indirect since they
do not relate to any real standard of living. One measures the
proportion of the population with the lowest fifth or tenth of
all incomes. Another measures the proportion with incomes below
a percentage of the mean or median income. Many international
poverty statistics in industrialised countries are now based on
the latter approach, where the threshold is typically set at 60%
of the equivalised median household income, before or after housing
costs are deducted. The third approach, used by the World Bank
to estimate the number of people in poverty in some countries,
uses measures such as the Gross National Product per head together
with other indicators, or an assumed average income of a small
number of US dollars a day. Such macro-measures do not reflect
the non-marketed aspects of poverty affecting individuals, particularly
in countries where needs are satisfied outside the market and
through relationships, though they can be supplemented by qualitative
studies to illustrate the meaning of poverty from the perspective
of those who suffer it.
"Official poverty lines" is
a name for measures used by governments. Some, such as governmental
minimum income standards (see below), are based on ideas of actual
living standards. Others are mere asocial statistical constructs
of arbitrary low incomes, or are based simply on the social assistance
benefit rates, neither of which may relate to any evidence of
minimal income needs.
PURPOSES FOR
POVERTY MEASURES
Different measures suit different purposes,
for instance to identify who is poor, to count them, to calculate
what is needed, and to establish eligibility for assistance. The
measures which best illustrate what customary living patterns
are and who fails to achieve them because of poverty are those
based on deprivation indicators. Government requirements for guides
to realistic income maintenance scales are helped by budget measures
for varied standards of living. Rowntree's "primary poverty"
measure was intended to illustrate minimum subsistence and to
show that failure to achieve it was caused by inadequate incomes
and not profligacy.
POVERTY DYNAMICS
The aetiology of what are perceived as social
evils is complex and poverty is commonly an aspect of them, but
not all perspectives treat it as the prime issue for action. Social
science discourse seeks to identify discrete causes, conditions
and consequences of poverty, where in reality the consequence
of one deleterious condition may be the cause of others. Surveys
show that many more people experience poverty during their lifetimes
than are poor at a point in time. In socially-mobile societies,
cross-sectional counts underestimate the numbers of those who
can speak about poverty from personal experience. Definitions
and measures which neglect this perspective on poverty may thus
be incomplete as reflections of the lived reality and suffering
poverty inflicts.
MINIMUM INCOME STANDARDS
Minimum income standards (MIS) are political
criteria openly or implicitly used by some governments to assess
the adequacy of income levels for some given minimum real level
of living, for a given period of time, for some section or all
of the population, embodied in or symbolised by a formal administrative
instrument or other construct.
Veit-Wilson coined the phrase in 1994 to distinguish
governmental standards from two other measures commonly used in
assessing minimum income adequacy:
(1) the variety of normative and empirical
social science measures used to conceptualise, define and measure
income poverty (poverty lines); and
(2) the levels of social assistance benefits
(sometimes called "official poverty lines").
The three measures differ in terms of the scientific
or political credibility of their adequacy standards. Scientific
findings about a society's standards of minimal income adequacy
should be valid irrespective of their political or economic implications.
Conversely, social assistance benefit levels are based on political
considerations of feasibility and cost, rarely on evidence of
adequacy. By contrast, MIS are based on politically-credible indications
of adequacy, and reflect a government's values and ideology, as
well as electoral considerations. Note, however, that governments
do not themselves use the term MIS for their criteria, and some
subsequent authors wrongly use it for social assistance measures
generally, confusing the normative standard with the minimum provision.
Governments use MIS for any or all of three
types of purpose:
— As guidelines towards setting some
level of the different tiers of the income maintenance system,
such as minimum wage rates, income tax thresholds and judicial
minimum inalienable incomes, contributory social security benefits
or means-tested social assistance and related benefits. Formulae
are commonly used to express various benefits as proportions of
the MIS.
— As criteria of the adequacy of various
parts of the income maintenance system to achieve politically
acceptable levels of living.
— As measures for identifying and counting
population groups "in poverty" for statistical purposes
and calculating the poverty gap by this measure, and also for
establishing eligibility for income maintenance or other programmes
for low-income households.
MIS—or, rather, the constructs or administrative
instruments in which they are embodied—are not necessarily
used to guide only the very lowest tier of the income maintenance
system (usually social assistance for the poorest). Veit-Wilson's
international study (Setting Adequacy Standards: how governments
define minimum incomes, Bristol: The Policy Press, 1998) found
only 10 countries using MIS at that time, and eight related to
higher tiers. The OECD study (Eardley, T et al (1996),
Social Assistance in OECD Countries, London: HMSO) found
24 countries with social assistance schemes. Although these are
commonly assumed to reflect some defined low level of living (whether
or not empirical evidence shows it can be achieved at those income
levels), many do not claim to meet participation standards of
adequacy to avoid social exclusion.
The instruments or constructs used by different
governments to symbolise or embody MIS included:
— Statutory minimum wage provisions,
implying that the fully employed worker should earn an income
adequate for social participation.
— Minimum state pension levels, achieved
by political consensus on adequacy.
— Empirical measures of the cost of
low levels of living, based on public attitude research, low income
households' actual consumption patterns, or budget studies to
construct modest levels of living.
If not annually negotiated, the basis of such
instruments is reviewed periodically (rebased) and in intervening
years the base figures are often updated in relation to some price
or earnings index. Income maintenance provisions themselves are
generally uprated following political guidelines, which may include
the guidance of the MIS.
Government choices reflect their various conventional
values, discourses and assumptions about issues such as whether
the MIS should reflect incomes adequate for all citizens or only
for lower-status people—the question of social stratification—and
whether the MIS should relate to people's normal expected income
source (average or minimum wages) or only to the state's responsibility
for ensuring adequate income maintenance in the absence of earnings.
The choice also depends on whether MIS policy makers perceive
adequate levels of living in terms of their composition and costs
(budget standards), political or popular consensus about minimum
tolerable levels (attitudinal standards), or their relationship
to other indicators (statistical standards). The political considerations
for an effective MIS include public acceptability, statistical
or other methodological defensibility, and operational feasibility
(Citro, C and Michael, R (eds) (1995), Measuring Poverty: A
new approach, Washington DC: National Academy Press).
July 2006
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