Fundamentally About a Lack of Material Resources?
‘Poverty’ is frequently said to be a socially constructed and contested concept; it means what we construct it to mean, and not everyone agrees. This is illustrated by the extensive academic debates on the subject. Nonetheless, we suggest that there has been a broad consensus in the UK literature around an understanding of poverty as either a lack of material resources, or an inadequate standard of living driven by a lack of material resources.
Lister (2004) reminds us that concepts, definitions and measures of poverty are not the same thing and that it is helpful to be clear about which we mean. A concept is “in essence… about the meanings of poverty—both to those who experience it and to different groups in society” (p. 4). The question of whether poverty is about material resources, or about something else as well, or instead, is a conceptual question. A definition is a more precise statement that distinguishes being in poverty from not being in poverty; for example, if the concept is a lack of resources, this lack could be defined in absolute or relative terms. Measures of poverty operationalize the definition so that we can put numbers on the extent or depth of poverty. In practice, as Lister points out, much academic work has focused on definition and measurement rather than conceptualization. It may be that this is precisely because the concept itself is largely shared.
Charles Booth’s survey of London in the 1880s was the first attempt to reach an evidence-based estimate of the extent of poverty in the UK. In doing so Booth established the principle of a “line of poverty”, reflecting a concept of poverty as low income relative to needs: “By the word poor I mean to describe those who have a fairly regular though bare income, such as 18 s to 21 s per week for a moderate family, and by ‘very poor’ those who fall below this standard, whether from chronic irregularity of work, sickness or a large number of young children” (Booth talking to the Royal Statistical Society in 1887; quoted by Glennerster 2004). As Gillie (1996) makes clear, this rough poverty line was an illustrative device only, used by Booth to help present his findings, rather than a means to identify the poor; classification was based on the subjective impressions of the School Board employees and survey enumerators who visited each household, and Gillie’s research reveals that overcrowding and the employment of servants were the main criteria Booth used in practice, not earnings. Nonetheless, these subjective assessments were clearly aimed at capturing material living standards in the household, including housing conditions, rather than (for example) employment, child health or education attendance, while Booth’s illustrative income lines reflected his belief that low income was the main driver of poor material conditions, with “drink and thriftlessness” the problem for a minority (Booth 1897, vol 1, pp. 147–148; cited by Gillie 2000).
Seebohm Rowntree took a similar “visual identification” approach to identifying the poor in his 1899 study of York (Veit-Wilson 1986, p. 92), asking his investigators to note down whether families were “living in obvious want and squalor” (Rowntree 1901, p. 114). Income itself was not a criterion for this assessment, as Veit-Wilson emphasizes. Like Booth’s, Rowntree’s income-based poverty line was constructed after the survey, mainly to distinguish between families in ‘primary’ and ‘secondary’ poverty—those who could not afford “necessities” on their income, and those who could, were they not spending money on other things, useful or otherwise. Rowntree’s definition of poverty, one of the first such attempts at definition, focuses on the ‘primary’ poor and the concept of inadequate income relative to needs: families were poor if their total income was insufficient to enable them to purchase what they needed to maintain physical efficiency.Footnote 1 This “subsistence standard” approach became widely adopted thereafter, first by social scientists and then by government (Abel-Smith and Townsend 1965). Rowntree’s second survey, in 1936, widened the understanding of necessities to include other needs, including a radio, a newspaper and presents for children, but the underlying concept of poverty as insufficient material resources to meet one’s needs (however defined) remained (Rowntree 1941).Footnote 2
After Booth and Rowntree, this concept of poverty appears to have become so widely accepted that many authors have dealt with the issue in depth without ever spelling out that this is how they understand it. Abel-Smith and Townsend’s own 1965 work opts to use National Assistance rates as the poverty line and includes a discussion of whether income or expenditure data gives a more accurate measure of standard of living, but leaves the idea that poverty is about inadequate material resources as implicit. Hills (2004) and Alcock (2006) contain extended discussion of different approaches to poverty definition and measurement that take as read that the concept of interest is a lack of material resources. Niemietz (2011) builds an extended critique of the UK’s official approach to poverty measurement, and the relative income measure in particular, but does not question the view that poverty is about material resources.
Townsend (1979) made an enormously influential contribution in taking an explicitly relative approach to thinking about needs, and also called for a wider concept of ‘resources’ to replace ‘income’ (p. 57), defining individuals and groups as living in poverty “when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary… in the societies to which they belong” (p. 31). Yet mostly what he lists under the heading of ‘resources’ are material resources, including income, assets and home production. He does also add “the value of public social services” (health and education), hinting at a multidimensional approach, but this is not developed in his 1979 book. In later work he distinguishes clearly between concepts of poverty and (“as important”) wider deprivation, including social deprivation (isolation, discrimination, lack of opportunities for education or employment), arguing that poverty (a lack of resources) is one of the factors that can lead to deprivation: “[Deprivation] turns on the level of conditions or activities experienced, [poverty] on the incomes and other resources directly available” (Townsend 1987, pp. 139–140).Footnote 3
Ringen (1988) points to the distinction between indirect and direct concepts of poverty, the former focusing (like Townsend) on the resources we need to reach a given standard of living, and the latter (like Booth’s and Rowntree’s initial observational surveys) on the standard of living itself. Income poverty lines tell us about resources, but Ringen argues that income is both logically flawed and inaccurate as a measure of standard of living, which he thinks is the more appropriate focus in European welfare states. Developing this theme, other researchers have proposed direct measures using indicators of material deprivation (e.g. Mack and Lansley 1985) or measures which combine income and material deprivation, sometimes called a ‘consistent poverty’ measure (e.g. Callan et al. 1993; Nolan and Whelan 1996, 2011). Callan, Nolan and Whelan’s work informed the Irish Anti-Poverty Strategy and subsequently inspired the ‘combined’ indicator in the UK suite of four. As well as capturing deprivation directly, the consensual approach taken in these studies means popular opinion rather than experts determines what is necessary.Footnote 4 Nonetheless, the focus remains overwhelmingly on material well-being.
Lister (2004) pushes us to think about the “relational/symbolic” aspects of poverty (p. 7), and its “non-material as well as [its] material manifestations”. Drawing on Jones and Novak (1999), she writes that “Poverty has to be understood not just as a disadvantaged and insecure economic condition but also as a shameful and corrosive social relation” (p. 7). This focuses us not only on the question of whether an individual is or is not considered to be in poverty, but also on everyday interactions between those in poverty and wider society, including the language and treatment experienced from politicans, officials, the media and others. However, Lister points out that while non-material aspects such as a lack of voice, respect and self-esteem can all be part of people’s experience of poverty, these things are not unique to the condition of poverty, but are associated with other oppressed minorities. In her view, too, poverty is understood as being about a material core, and she argues for a definition that captures this.
In academic debate about poverty in the UK, then, we suggest that discussion has focused predominantly on definitions and measures, with widespread underlying agreement that the concept in question is about material living standards. This consensus crumbles when we step further afield. In the development literature poverty is increasingly understood as multidimensional in a substantive sense, with measures required to capture wider deprivations that may have other drivers than a lack of material resources.
Amartya Sen’s work has been seminal in this regard. Like Ringen, Sen points out that material resources are a means to an end, not an end in their own right: they matter because of the kind of life they enable people to lead. But Sen’s idea of the relevant goal is broader than standard of living: he argues that to lead a good life people need to have the ‘capabilities’ to achieve certain ‘functionings’—“from being well nourished or avoiding premature mortality to taking part in the life of the community and developing the skill to pursue one’s work-related plans and ambitions” (Sen 2011, p. 233). Poverty should therefore be defined not narrowly in terms of material resources but more broadly as capability failure, bringing access to other goods, such as health care and education, into focus. Note that Sen is clear that the capability approach “does not involve any denial of the sensible view that low income is clearly one of the major causes of poverty, since lack of income can be a principal reason for a person’s capability deprivation” (Sen 2001 p. 87). People can be capability deprived without having a low income, for example because of discrimination, or because services are not available locally. Nevertheless, low income remains one key cause of capability deprivation.
The work of Alkire, Foster and colleagues at the Oxford Poverty and Human Development Initiative (OPHI) builds on Sen’s framework to develop multidimensional poverty measures, rooted, like Sen’s, in a broad vision of the good life, and encapsulating multiple forms of deprivation. Motivating their approach, they quote Sen (2000): “Human lives are battered and diminished in all kinds of different ways, and the first task… is to acknowledge that deprivations of very different kinds have to be accommodated within a general overarching framework” (quoted by Alkire et al. 2015, p. 4). They go on to argue that “If poverty is understood to be a shortfall from well-being, then it cannot be conceptualized or measured in isolation from some concept of well-being” (pp. 3–4) [italics added]; “poverty measures… must reflect the multifaceted nature of poverty itself” (p. 4).
Alkire and Foster’s empirical work captures measures of material resources alongside wider domains, as do the most well-known practical operationalizations of Sen’s approach, the United Nations Development Programme (UNDP)’s Human Development Index and Multidimensional Poverty Index, both of which combine indicators from three dimensions—education, health and standard of living (e.g. UNDP 2015). The European Union has also committed to a multidimensional measure for their 2020 ‘poverty and social exclusion’ target, though this only adds household joblessness to measures of income poverty and material deprivation (European Commission 2011).
A separate driver for multidimensional indicators, with particular reference to children, has been the United Nation’s commitment to a human rights approach, shaped by the Convention on the Rights of the Child (CRC). In 2006 the UN General Assembly adopted an international definition of child poverty which is rooted in the CRC and is unambiguously multidimensional: “Children living in poverty are deprived of nutrition, water and sanitation facilities, access to basic health-care services, shelter, education, participation and protection”. Attempts to develop multidimensional indices of child poverty appropriate for this definition have followed (e.g. Roelen et al. 2009; Gordon and Nandy 2012).
In light of this wider context, can the changes to the Child Poverty Act be seen as an overdue attempt by the British government to take a more expansive approach to thinking about poverty? Three points are important.
First, like Sen, Alkire and Foster’s objection to focusing poverty measurement on material resources is that this excludes other forms and causes of deprivation, rather than that resources are themselves not important. An attempt to broaden the UK’s approach in line with wider global thinking would have involved adding to, rather than replacing, the measures in the Child Poverty Act. Indeed, the multidimensional option proposed in the original 2002 consultation—combining indicators of low income, worklessness and low educational attainment—would have made a more coherent alternative measurement approach than a decision to focus only on the latter two variables.
Second, reserving the term ‘poverty’ to mean a short-fall in material resources (as we argue has been the accepted practice in the UK) rather than OPHI’s “shortfall from well-being” should not be seen as a rejection of the concept of well-being, or of the idea that there are many ways in which lives can be diminished; it is simply a different use of language. Veit-Wilson (1986) argues that discussion about action would be helped if we agreed to use the term ‘deprivation’ for “the concept of unmet need” and ‘poverty’ for “the condition of lacking money resources” (p. 94) Townsend (1987) uses the terms in a similar way, as noted above. Lister (2004) concurs, arguing that defining poverty as capability failure “is in effect conflating a wider condition… be it capabilities, quality of life, well-being or social quality—with what is conventionally understood as one aspect of that condition, namely being in poverty or not” (p. 18). She suggests we retain the more specific focus of the term ‘poverty’ by using ‘capability deprivation’ to refer to deficiencies in other domains.
Third, differing preferences over the use of the word ‘poverty’ plausibly reflect different contexts in which poverty measurement takes place, and the policy focus that the choice of indicators drives. We know that “measures of child poverty undoubtedly influence policies to reduce child poverty” (Alkire and Roche 2012, p. 103). Initiatives such as OPHI and the UN HDI push back against a long-standing dominant focus by organisations like the World Bank on economic growth as the central goal for development. In a context in which reductions in dollar-a-day poverty are seen as evidence of “pro-poor growth” even where social spending remains low and public services poor quality, the call for multidimensional poverty measures is a demand for a wider view of development which encompasses broader human flourishing, and for corresponding attention to policies which go beyond growth-maximization. By contrast, in the UK, public services are well-established and universally accessible. This is not to say that access to the highest quality provision is equal, nor that outcomes are fair—we know that is not true, thanks to a range of administrative and survey datasets such as the National Pupil Database and the Health Survey for England, and the Opportunity for All reports recognized and reported on these wider deprivations and inequalities. But the complexity of factors influencing poor outcomes in education or health makes it harder to pin down the role of government policy choices. Given a social security system with near comprehensive reach and the existence of robust microsimulation models such as those used by the Institute of Fiscal Studies, policy impact on income poverty is easier to isolate. In this context, a desire to keep poverty measures focused on material resources alone may reflect a concern to keep a clear spotlight on inadequate household financial resources, and not to allow income poverty to be diluted or lost within a broader set of indicators.
60% Median: A Deeply Flawed Measure?
There is growing agreement in the academic literature that the distinction between relative and ‘absolute’ definitions of poverty is overplayed and debates between them sterile (Lister 2004; Alcock 2006). Joseph and Sumption’s (1979) definition of an absolute standard—“one defined by reference to the actual needs of the poor and not by reference to the expenditure of those who are not poor”—is often set up in opposition to Peter Townsend’s classic relative definition, in which needs are rooted what is normal in the society in which a person lives, as set out above. But as many writers have pointed out, all measures must surely have reference to social standards: “universal absolute needs… can only be satisfied in particular historical and cultural contexts” (Lister 2004, p. 36). Joseph and Sumption (1979) argue that “a family is poor if it does not have enough to eat”, but beyond a very bare subsistence level food is socialized—we eat “food not nutrients” (Dowler and Leather 2000, p. 208). Adam Smith made a similar point in relation to clothing, famously including as a “necessity” a linen shirt, because “creditable day labourers” would be ashamed to appear in public without one (1776, p. 691). So indeed did Booth, writing that “very poor” families were those whose means were insufficient “according to the usual standards of life in this country” (Simey and Simey 1960, p. 279; and see Veit-Wilson 1986).
That human material needs—and therefore poverty—can only be defined in relation to social norms still leaves the question of measurement wide open. The UK’s outgoing ‘headline’ measure of 60% of equivalised contemporary median income continues to be used as the main poverty indicator in the European Union. Is it nonetheless “deeply flawed”, as the Coalition Government argued (DWP 2015)? Two main critiques have been levelled at the indicator.
First, it is arbitrary: why 60%? Why not 50%—as in fact used in some countries (e.g. Australia) and in many OECD publications (e.g. OECD 2015)? Why not 70%, or indeed any other number? Niemietz (2011) argues that the relative line is used without evidence as an “approximation of the cost of social participation”. He advocates instead a measure based on a combination of material deprivation indicators and a budget-standard method that calculates more directly what families actually need. The Joseph Rowntree Foundation have also argued for a budget-standard approach, developing their own poverty indicator based on their Minimum Income Standard, developed and updated on the basis of expert-facilitated focus group discussions about the needs of different family types (JRF 2016).
Second, academics have been alert to the problem the UK government repeatedly highlights in their 2012–2013 consultation document—that in a recession, relative poverty may be seen to fall simply because median incomes fall. There is also the inverse issue, the “Irish paradox”, so-called because in the Irish boom of the late 1990s relative poverty rose because incomes at the bottom, while increasing, grew less rapidly than median income (Hills 2004, p. 42).
Nonetheless, there is general agreement that we need a poverty measure that can keep up with social standards in a consistent way over time, if we accept that these standards are relevant: “As long as living standards rise over time, poverty standards need to be upgraded over time to remain socially relevant, adjusting in some way to changes in economic circumstances and social perceptions,” (Niemietz 2011, p. 66). Hills (2004, p. 63) examines British Social Attitudes data and concludes that people have in mind “a poverty line that rises in real terms in some way over time”. This is a clear strength of indicators based on a share of contemporary median income over the longer term, and a drawback with budget standard measures, which need to be updated manually, introducing confusion about what is behind a change in measured poverty—a change in households’ circumstances or a change in the line.
Rather than throwing out the 60% median indicator, then, its limitations point instead to the need to supplement it with additional indicators. This was, of course, the approach originally taken by the DWP and in the Child Poverty Act, which alongside the relative income measure included indicators based on a fixed income line, combined income and material deprivation, and poverty persistence. For a still fuller picture, one might also want to track changes in poverty against alternative shares of the contemporary median (50% or 70%).