Friday, 3 July 2009

Tackling poverty

Those on the left some 35 years ago redefined poverty not as an absolute level of income, but as an arbitrary percentage. The standard now is a family income of not more than 60% of the national median income, that is the middle income if all were laid out according to size.

Apart from the fact that such a definition means that there will always be inequality, a rise in even a few incomes in one region can increase the poverty in others without changing anything there, because the national median income has risen.

Since in low wage areas prices, housing and other factors tend also to be low, should the median not be the median in that area or region? Otherwise poverty will be falsely measured, and benefits increased. There will be less incentive to work, higher unemployment, etc. This is born out by the finding of the Joseph Rowntree Foundation paper that in Wales 32 % of children, - 192,000, live in poverty. The same is probably true of other low wage regions in the west and north.

Furthermore, unless something is done to increase productivity and incomes in these areas, the situation will be an enduring one. Unemployment and welfare dependency will become a common situation.

The problem is a reflection of the arbitrary definition based on a national "average".

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