Does Relative Poverty matter?

David Agnew · 22-11-2006, 01:51 PM

Nobody wants people to starve, but provided that everyone has enough for their basic needs, does it matter if some people have incomes vastly greater than others?

I put up a book on the (now vanished) 'Suggested Reading' thread called 'Dark Heart' about the British 'underclass' and what goes on (rampant crime, child prostitution, the drug culture, family breakdown, workless families, stress related illness). The author suggests that this is largely down to relative poverty.

I don't think it is simple as this, because I think that the argument about both absolute and relative poverty being worse in the 1930s, and yet there being fewer social problems is correct.

If relative poverty does matter, then what should be done about it? New Labour believes that the correct thing to do is to expand the welfare system still further. I am against this because I am convinced by the argument put forward in 'The Welfare State We're In' that the Welfare State creates the problems it claims to solve (the people that New Labour describes as 'socially excluded' live on 'sink estates' and attend 'sink schools' that were created by the state).

My view is that absolute poverty is unacceptable, and relative poverty is undesirable, but the welfare approach is a mistake, because as previously mentioned, the dependency culture and the 'underclass' go together like bread and butter. The welfare system (as currently constituted) drains money from the productive economy, thereby slowing growth, and making everyone worse off in the long term.

Instead of the welfare approach, the state should:
* Ensure that everyone has access to training so that they can acquire a marketable skill.
* Replace welfare with workfare
* Support family and community, so that people will help each other.

Do you thing that relative poverty matters? If so, what should be done?

Internationalist · 22-11-2006, 02:10 PM

Quote:

Originally Posted by David Agnew

My view is that absolute poverty is unacceptable, and relative poverty is undesirable, but the welfare approach is a mistake, because as previously mentioned, the dependency culture and the 'underclass' go together like bread and butter. The welfare system (as currently constituted) drains money from the productive economy, thereby slowing growth, and making everyone worse off in the long term.

I agree with your view on this. Welfare drains initiative as well as the productive economy.

I would add the obvious point that it is more than just welfare benefits. We have a whole host of public services for which the government is the "provider" thereby reinforcing everyone's dependency.

Add to that the number of public sector workers, the proliferation of tax credits and the number of companies dependent on public sector contracts and you have almost a state monopoly.

mkpdavies · 22-11-2006, 02:16 PM

Relative poverty is jealousy really isn't it. If the person in "poverty" beleives it isn't fair that they are in that position, then they are more likely to not care about the laws the system lays down.

How does someone who isn't that brilliant academically acheive? The system is totally set up against them. It almost doesn't matter how hard they work, there will always be a limit on what they can earn. Is it any wonder that a number of people in that position choose to stop playing by the rules.

Throw into the mix a load of cheap competition from mass immigration and the effects of outsourcing from globalisation. How exactly is someone who doesn't have a silver spoon in their mouth at birth, or the brains to do anything other than the micky mouse jobs that our economy now creates, supposed to "get on"? Hard work won't cut it any more, it has to be the RIGHT kind of hard work, or even just the right kind of work.

In the past this "underclass" of people could still make themselves a good life, simply by working hard in a manual labour job, or even picking up a trade in manufacturing. You didn't have to go to university, indeed that was just for the very brainy. Now if you don't go to University you are treated almost like a reject.

I think there is a whole section of people that feel they can't win within the system now. They see it as unfair and see opportunities in the black market and criminal world, where they can do well for themselves.

Can you blame them for choosing to play by different rules?

harryaldridge · 22-11-2006, 02:57 PM

I am a firm believer that the welfare state should be a safety net and nothing more. Where that line is drawn though is a different matter.

So far there is absoloute poverty which is defined as subsistence. Then there is relative poverty which is defined as 60% of median income or less.

At the risk of repeating a horrible phrase, i think there is a 'third way' (shivers). This is where a threshold is set and moved each year, but is above the subsistence level but below the 60% of median income.

For example how should poverty be defined? Simply subsistence? Access to television and communications and leisure? Should somebody without a mobile phone be classed as in poverty for example? what about a landline telephone? What about somebody without enough money to go to the cinema every so often?

I think a new level could and should be set as to what poverty is in todays world. I would also introduce a new inflation measure for this poverty level that weights more heavily gas, electricity and transport costs and less havily ipods and plasma TVs, so that the real inflation rate of the individuals is accounted for more accurately.

I do not think relative poverty as defined by a % of median income is a good way to define poverty, but a new 'absoloute' level should be set. This level should then be uprated by no more than the increase in wages/GDP but more than inflation. This would have the effect of ensuring that each year the level relative to median income would fall whils still rising year on year. Welfare costs would fall by not having to chase constantly moving targets (at 60% of median income there will always be people in poverty).

THoughts? Thinking as i type so have not had a chance ot think through fully or explore effects.

Without a doubt we should not endorse simple redistribution. There is no logic or rationale and it damages economic incentives by stealing from the top and handing out to the bottom. This also leads to the creation of poverty traps.

I think all parties have now recognised the goal of government should be equality of opportunity and not equality of output. This should create a soceity where everybody is able to make the most of their talents and are not held down by external forces. This means free education for all for example.

We should focus policies in these areas, breaking down barriers to social mobility and creating a meritocracy. We should not support wealth/income redistribution in itself, prefering to target the cause and not the symptom.

mkpdavies · 22-11-2006, 04:12 PM

How do you make it that all hard work is rewarded and not just brain power?

I think that's pretty important if we are ever going to have a truly "fair"system, where people have no excuses for slacking off or turning to crime.

brian pearson · 22-11-2006, 04:33 PM

[quote="mkpdavies"]How do you make it that all hard work is rewarded and not just brain power?

Adopt communism ?

Dishing out free money has proved to be the biggest cause of social breakdown in this country.

eublues · 22-11-2006, 05:21 PM

To deal with absolute poverty there has to be some sort of safety net (for UK citizens only!).

Relative poverty is also an issue - because massive disparities damage the social cohesion that a healthy society needs and become self-sustaining, and because the mega rich become much too powerful.

In the last 20 years or so the gap between the lowest paid in many public or private sector organisations and the highest has gone from about 5-10x to more like 20x.

Some sort of wealth tax and inheritance tax is fair - but how to do it without creating undesirable consequences I don't know. UKIP should be working on this.

mkpdavies · 22-11-2006, 05:42 PM

Quote:

Adopt communism

Doesn't work. Human nature doesn't allow it too.

But human nature will see people who feel oppressed lash out or play by their own rules.

Not everyone is born the sharpest tool in the box, but they can work hard and add just as much value as some keyboard jockey like me. At the moment society rewards mental capability much better than physical.

How is that ever going to be fair and why are people surprised that some ain't going to accept those rules?

If this government hadn't of opened the floodgates, physical work would have started lacking supply and thus the wages would have gone up. Why are the same people being submitted to unfair practice time and time again.

If you think that's just tough on them, then I don't think you can be too surprised if you have crime committed against you one day. They will have their moral justifcation.

prober · 23-11-2006, 11:10 AM

Most of us have been poor at some time ( eg as students). There are 4 types of poverty.... poor but upward mobile , just needing a door open to get a job, poor due to medical/mental illness, hindering ability to get a job, poor cos of no social values creating a continuing cycle, "poor" cos they are bright enough to milk the system and exploit its tick box weaknessess. The 1st category needs no help, the second does, the third needs a return to strong social &/or religious values in schools etc, the 4th creates public anger and collapse of trust in politicians & needs a Maggie Thatcher with her cane.

There is a vast "social sector" industry of civil servants etc out there that has a vested interest in widening the definition of poverty & help to be given to the "needy". Should we be brutal enough to cast them into poverty by getting rid of their jobs ? What is the % of job creation admin cost compared to cash help to poor ? 50/50 ?

brian pearson · 23-11-2006, 11:50 AM

Students Poor ! Been in a Union bar lately ?

22-11-2006, 01:51 PM	#1 (permalink)
David Agnew Member Join Date: Jun 2005 Location: Maidenhead Posts: 296	Does Relative Poverty matter? Nobody wants people to starve, but provided that everyone has enough for their basic needs, does it matter if some people have incomes vastly greater than others? I put up a book on the (now vanished) 'Suggested Reading' thread called 'Dark Heart' about the British 'underclass' and what goes on (rampant crime, child prostitution, the drug culture, family breakdown, workless families, stress related illness). The author suggests that this is largely down to relative poverty. I don't think it is simple as this, because I think that the argument about both absolute and relative poverty being worse in the 1930s, and yet there being fewer social problems is correct. If relative poverty does matter, then what should be done about it? New Labour believes that the correct thing to do is to expand the welfare system still further. I am against this because I am convinced by the argument put forward in 'The Welfare State We're In' that the Welfare State creates the problems it claims to solve (the people that New Labour describes as 'socially excluded' live on 'sink estates' and attend 'sink schools' that were created by the state). My view is that absolute poverty is unacceptable, and relative poverty is undesirable, but the welfare approach is a mistake, because as previously mentioned, the dependency culture and the 'underclass' go together like bread and butter. The welfare system (as currently constituted) drains money from the productive economy, thereby slowing growth, and making everyone worse off in the long term. Instead of the welfare approach, the state should: * Ensure that everyone has access to training so that they can acquire a marketable skill. * Replace welfare with workfare * Support family and community, so that people will help each other. Do you thing that relative poverty matters? If so, what should be done?

22-11-2006, 02:16 PM	#3 (permalink)
mkpdavies Uber Member Join Date: Sep 2004 Location: Woking Posts: 31,112 Party: Libertarian Party	Relative poverty is jealousy really isn't it. If the person in "poverty" beleives it isn't fair that they are in that position, then they are more likely to not care about the laws the system lays down. How does someone who isn't that brilliant academically acheive? The system is totally set up against them. It almost doesn't matter how hard they work, there will always be a limit on what they can earn. Is it any wonder that a number of people in that position choose to stop playing by the rules. Throw into the mix a load of cheap competition from mass immigration and the effects of outsourcing from globalisation. How exactly is someone who doesn't have a silver spoon in their mouth at birth, or the brains to do anything other than the micky mouse jobs that our economy now creates, supposed to "get on"? Hard work won't cut it any more, it has to be the RIGHT kind of hard work, or even just the right kind of work. In the past this "underclass" of people could still make themselves a good life, simply by working hard in a manual labour job, or even picking up a trade in manufacturing. You didn't have to go to university, indeed that was just for the very brainy. Now if you don't go to University you are treated almost like a reject. I think there is a whole section of people that feel they can't win within the system now. They see it as unfair and see opportunities in the black market and criminal world, where they can do well for themselves. Can you blame them for choosing to play by different rules? __________________ http://brits4ronpaul.blogspot.com/ http://wokinglibertarians.blogspot.com/ http://lpuk.org My ignore list Labour, Blue Labour, Lib Dems

22-11-2006, 04:12 PM	#5 (permalink)
mkpdavies Uber Member Join Date: Sep 2004 Location: Woking Posts: 31,112 Party: Libertarian Party	How do you make it that all hard work is rewarded and not just brain power? I think that's pretty important if we are ever going to have a truly "fair"system, where people have no excuses for slacking off or turning to crime. __________________ http://brits4ronpaul.blogspot.com/ http://wokinglibertarians.blogspot.com/ http://lpuk.org My ignore list Labour, Blue Labour, Lib Dems

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22-11-2006, 02:57 PM	#4 (permalink)
harryaldridge Senior Member Join Date: Oct 2005 Location: West Sussex Posts: 1,912	I am a firm believer that the welfare state should be a safety net and nothing more. Where that line is drawn though is a different matter. So far there is absoloute poverty which is defined as subsistence. Then there is relative poverty which is defined as 60% of median income or less. At the risk of repeating a horrible phrase, i think there is a 'third way' (shivers). This is where a threshold is set and moved each year, but is above the subsistence level but below the 60% of median income. For example how should poverty be defined? Simply subsistence? Access to television and communications and leisure? Should somebody without a mobile phone be classed as in poverty for example? what about a landline telephone? What about somebody without enough money to go to the cinema every so often? I think a new level could and should be set as to what poverty is in todays world. I would also introduce a new inflation measure for this poverty level that weights more heavily gas, electricity and transport costs and less havily ipods and plasma TVs, so that the real inflation rate of the individuals is accounted for more accurately. I do not think relative poverty as defined by a % of median income is a good way to define poverty, but a new 'absoloute' level should be set. This level should then be uprated by no more than the increase in wages/GDP but more than inflation. This would have the effect of ensuring that each year the level relative to median income would fall whils still rising year on year. Welfare costs would fall by not having to chase constantly moving targets (at 60% of median income there will always be people in poverty). THoughts? Thinking as i type so have not had a chance ot think through fully or explore effects. Without a doubt we should not endorse simple redistribution. There is no logic or rationale and it damages economic incentives by stealing from the top and handing out to the bottom. This also leads to the creation of poverty traps. I think all parties have now recognised the goal of government should be equality of opportunity and not equality of output. This should create a soceity where everybody is able to make the most of their talents and are not held down by external forces. This means free education for all for example. We should focus policies in these areas, breaking down barriers to social mobility and creating a meritocracy. We should not support wealth/income redistribution in itself, prefering to target the cause and not the symptom.

22-11-2006, 04:33 PM	#6 (permalink)
brian pearson Senior Member Join Date: Dec 2005 Location: nottinghanshire Posts: 757	[quote="mkpdavies"]How do you make it that all hard work is rewarded and not just brain power? Adopt communism ? Dishing out free money has proved to be the biggest cause of social breakdown in this country.

22-11-2006, 05:21 PM	#7 (permalink)
eublues Uber Member Join Date: Nov 2004 Posts: 3,122	To deal with absolute poverty there has to be some sort of safety net (for UK citizens only!). Relative poverty is also an issue - because massive disparities damage the social cohesion that a healthy society needs and become self-sustaining, and because the mega rich become much too powerful. In the last 20 years or so the gap between the lowest paid in many public or private sector organisations and the highest has gone from about 5-10x to more like 20x. Some sort of wealth tax and inheritance tax is fair - but how to do it without creating undesirable consequences I don't know. UKIP should be working on this.

23-11-2006, 11:10 AM	#9 (permalink)
prober Senior Member Join Date: Oct 2005 Posts: 855	Most of us have been poor at some time ( eg as students). There are 4 types of poverty.... poor but upward mobile , just needing a door open to get a job, poor due to medical/mental illness, hindering ability to get a job, poor cos of no social values creating a continuing cycle, "poor" cos they are bright enough to milk the system and exploit its tick box weaknessess. The 1st category needs no help, the second does, the third needs a return to strong social &/or religious values in schools etc, the 4th creates public anger and collapse of trust in politicians & needs a Maggie Thatcher with her cane. There is a vast "social sector" industry of civil servants etc out there that has a vested interest in widening the definition of poverty & help to be given to the "needy". Should we be brutal enough to cast them into poverty by getting rid of their jobs ? What is the % of job creation admin cost compared to cash help to poor ? 50/50 ?

23-11-2006, 11:50 AM	#10 (permalink)
brian pearson Senior Member Join Date: Dec 2005 Location: nottinghanshire Posts: 757	Students Poor ! Been in a Union bar lately ?