Blog: The Crescent Moon Shines On Us All
by mo123

[video/audio] Just what is poor?

I talk all the time about being poor, but I do not compare to these people.

Date:   8/1/2009 8:27:30 AM   ( 15 y ) ... viewed 3178 times


Just what is poor?

Boys in Hulme, Manchester, in 1954
Views of what constitutes poverty change with time

Michael Blastland
Different ways of seeing stats

Many people might think of poverty as absolute, the lack of certain basic amenities, but politicians measure it in relative terms. So we could see poverty fall during the recession, writes Michael Blastland in his regular column.

Are you poor? Well, it depends on the income of someone you've never met.

Poverty can be a puzzle, or at least the way it's measured. News this week, for example, was that UK pensioners suffer worse poverty than Romanian , even though four times richer.

Intrigued? Use our interactive graphic to find out who's poor by moving the smiley faces around and watching the boundaries change.

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The slider's default position is £393 per week - the UK median income for a couple without children, before housing costs, for 2007/8. That means the poverty line is set at £235 per week. See how the median line switches from one smiley to another as they're moved. The median is always the person in the middle. It doesn't matter to the median who's on what income, only how many are on either side.

You'll also see as you move the median smiley that the pink poverty zone grows or shrinks. Poverty is defined as below 60% of the median. So as median smiley's income grows, so does the zone in which other smilies are labelled poor.

Romanian woman
Are British pensioners really poorer than those in Romania?

Try moving the median smiley left to make it poorer. If the line swaps to someone else, move that too. You'll see that even though the incomes of the poor haven't changed, some stop being poor just because the median moves.

Move the median in the other direction to make it richer and more people become poor even though their incomes don't change.

So one person's poverty also depends on how well the person in the middle is doing.

See if you can make no-one poor, then see how many you can make poor. By dragging the middle smiley, with five others, to the far right, the poverty line shifts to £600 per week (31,200 per year).

Homeless people
Some would see homelessness as an absolute indicator of poverty

Now try moving the rich and see what happens to poverty. Nothing at all. Some people think that because poverty is relative that it is the same as inequality. It isn't. The richest can become richer and it has no effect at all on poverty.

This is not to comment on the experience of poverty or the rights and wrongs of who gets what, just to show how the system works.

So here are some curiosities about poverty. It might improve during the recession, not because the poor get richer, and nor because the poor do, but because those who are on benefits could stay where they are but the median might fall.

Poor Victorian-era woman
Since Victorian times there have been concerted efforts to overcome poverty

Romanian pensioners can have much less money than UK pensioners but fewer of them be described as poor. That's because they are closer to the median person in their country, not because they have more money. In fact, they are simply bunched together at what others would consider the bottom.

But who is this person in the middle? Can we have a national quest to find out, compered by Graham Norton, where we line up the whole population according to income, lowest to highest, and name the person bang in the centre?

So there are some questions.

Why not a fixed figure for poverty rather than one that changes as people become richer?

Fixed at what? Fixed 50 years ago? Fixed at $2 a day - the international standard for absolute poverty? Anything fixed is soon left far behind by dramatic changes in the wealth of people as a whole. It's argued that poverty is the lack what most people take for granted and so has to change as society changes.

Why does this calculation matter?

It's the calculation the government uses to measure its success in reducing poverty, including child poverty, for which it sets targets. It's also used for country comparisons like the recent report that pensioner poverty in the UK was the fourth worst in the EU.

Why the median, not the mean?

Because calculating the mean would include everyone, including the Chelsea football team's stellar earners. Would it make sense to say that one person's poverty depends on what John Terry earns? Using the mean would make it a measure of inequality.

Why 60% of the median and not 55 or 65?

The line is to some extent arbitrary, but is now used internationally and seems to reflect a view that this is the point at which people struggle to share the ordinary expectations of the majority.

How do we know what people earn?

The numbers that appear on the graphic as you first see it are the real numbers (approximately) as reported in the survey of Households Below Average Income. They show disposable income - that's after tax and benefits, adjusted to take account of household composition - if there are more people in the household they need more money to enjoy the same standard of living as someone living alone. The survey is of 25,000 households annually.

Send us your comments using the form below.

Since poverty is admitted to be subjective, and based on people's perceptions of basic things that people should have, why not simply ask a number of people what wage they believe constitutes the borderline of poverty? Then draw up a distribution of people's opinions. Maybe a meaningful definition of poverty would then be the wage below which 90% of people consider your wage to be insufficient.
Will Becker, Sheffield

"Poor" used to mean you couldn't afford to feed your family. Now it means you can't afford broadband internet.
Rik Sweeney, London

To say that people live in poverty in this country is an insult to the third world. People my be poor or disadvantaged but have access to health care, education, housing etc. Poverty was effectively eliminated with the introduction of the welfare state following WWII. It is now time to remove the word "poverty" to describe the disadvantaged in the UK.
Andrew Potter, Newport, England

There is one big problem in using this method to calculate how many people are living in poverty - it doesn't take the cost of living into account. It wouldn't matter if we all earned £1million a month if a pint of milk or load of bread cost us £500k. On the other hand if we all earned £100 a month but milk and bread were 1p then we wouldn't feel poor at all.
Rod, Edinburgh

I am currently visiting India where poverty is defined as the inability to consistently afford 800 calories a day. Nobody in the UK is in poverty.
TimN, Cambridge

My family would LOVE to have the median income each week. Even with family tax credits and child benefit we are still below this level. However, we are fortunate as our mortgage is not the largest bill anymore - the gas and electric is. We do not feel POOR, but we have to be careful and think before we spend money on anything but necessities.
Jacquie, Yorkshire

If poverty is measured as 'below 60% of the median' then, if everyone's income was set at £5,000 per annum, no one would be deemed as poor! What a strange way of measuring poverty.
Michael W , Chatham, England

The statistic I would be interested in understanding is the percentage of pensioners each country has that is under the median of the entire European Union - I think this is probably a better matter of relative poverty gauged against those countries which pensioners can move between relatively easily. Or alternatively the percentage of a pensioners income required to purchase two or three standard shopping baskets in each country - after all this is a pretty standard measurement used by business people worldwide to judge salary requirements and expectations when moving between countries so why should it not be used to measure the value of pensioners money between countries. What I would want to know is can UK pensioners buy less or more with their money than if they were living elsewhere ?
George, Huddersfield

My husband and I both work full time, in qualified positions and pretty much always have. Our household net income is, per month, £2900. We have old cars (eg 10+yrs old), neither of us have ever owned a new car, we live in a housing association property and we never holiday abroad. We have two children from my first marriage living with us and he pays maintenance for his two children, who do not live with us. We rarely, perhaps three times a year go out as a family or a couple. Most of our furniture is second hand and despite living in the property for about five years, we have not finished decorating it due to lack of finance available. We can barely afford to live from one month to the next.

Are we rich, I do not think so, relatively speaking. Who is the average person and what do they earn? How do people afford to buy a property, we couldn't even consider getting one through the key worker scheme as the repayments were way too high. Do we have debt, yes, but less than £12,000. We feel stuck in a rut.
Heidi Towner, Aldershot, Hants

Sounds quite manipulative to me - "relative terms" are so open to interpretation or bias. All Statistics are at danger of political interpretation and/or of being rigged. Surely the only measure of poverty is whether you can afford pay your accommodation, bills, utilities, medicines, food and transport. If you can't, then quite simply you are in poverty.
Peter Jackson, Bexhill-on-Sea

There's more to it than poverty in financial terms, per se. There's a poverty of position and influence, viz. the bankers received billions almost instantaneously from the so-called government, whereas pensioners qualifying for pension credit have to wait until next October for an adjustment to an already grossly over-estimated earning power of their small savings. Pension credit is, in any case, a "government" joke. They claim it's a reward for saving - and then penalize pensioners with modest savings.
A Grimlander, England

It seems to me common sense that poverty in real terms is hardship. I live on under £10,000 a year, but have all the luxuries I need, I am retired, I have a £3,000 computer system, plus a £3,000 camera. All my cupboards are full of food as is my fridge, and I have everything I need in real terms. How many pensioners live on this kind of money or have more income? Are they classed as poor? e should describe poverty as hardship, not the amount of money we have.
Nick, Anglesey

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