Poverty the defining problem of our age



The defining problem of our age is going to be poverty. There have been many startling indications recently. The number of malnutrition cases treated at NHS hospitals, for instance, has nearly doubled since the onset of recession. There were 5,499 cases last year. Diagnoses of rickets – a disease of poverty associated with vitamin D deficiency – have also risen significantly. And for every example that ends up in hospital, how many more starving people linger untreated in their homes? Could it be tens of thousands?

If they have somewhere they can call home, that is. In 2011, 12 per cent of households in London were classified as overcrowded. That relatives and friends are no longer willing to provide accommodation is the most common reason for homelessness. No wonder the number of people calling the housing charity Shelter for help is at an all-time high of almost 175,000 calls in the past 12 months, up 10 per cent on the previous year. Visits to the advice pages of the charity's website are also up more than 20 per cent, with almost 400,000 people seeking help online.

Sasha, a single mother from London, tells her story. She explains that she has been homeless for a year. She gave the local authority her baby's birth certificate and they said she was on a waiting list for a home but it never came through. "My case-worker just ignores me. It's bearable but I'm sleeping on a mattress on my friend's floor with my child and I'm working hard." I will come back to the fact that paid employment may not lift people out of poverty.

Debt is the third key indicator. Household debt in the UK has reached a record level, according to recent figures from the Bank of England. In fact the poorest 10 per cent of households have debts more than four times their income. The Maxed Out report says the average debt repayments of people in the poorest 10 per cent of households are nearly half of their gross monthly incomes.

Such poverty has not been seen in Britain for many decades. It touches millions of adult
s and children. What confuses the picture, however, is that poverty can be defined in two ways. The key measure, I think, is "absolute poverty", that is, lack of food and shelter and other basic needs. The Chilean economist Manfred Max-Neef says that needs are "finite, few and classifiable" (as distinct from the conventional notion of conventional economic "wants" that are infinite and insatiable). So there is no problem in defining absolute poverty.

"Relative poverty", a measure preferred by the Government, describes all those whose incomes are less than 60 per cent of median household income. People below this line may not be starving but they are poor in the sense of not being able to enjoy the full life as lived by the majority of the population. By this definition upwards of 13 million people or 21 per cent of households are in poverty. This is an astonishing proportion. Whereas people caught up in absolute poverty may go hungry or sleep on a mattress like Sasha, those who are "relatively" poor may suffer from low self-esteem and other psychological complaints.

However, whichever way you define poverty, an extraordinary thing has just happened. Until recently, you couldn't really be poor if you had regular wages. You could find yourself on a low income, yes, but not poor. Indeed until the 18th century, "indigence", as poverty was called, was felt to be the natural condition of humanity, from which labour – or the charity of others – was the sole relief.

But now you can be in work and poor. I call these the "new poor", the victims of falling real incomes, when prices rise faster than wages, a disagreeable phenomenon of the past 10 years. This is revealed by the Joseph Rowntree Foundation's annual survey published last weekend.

It shows that more than half the 13 million people in poverty in the UK (6.7 million) are in a family "where someone worked"! The remaining 6.3 million people were in workless working-age families or families where the adults were retired.

Typically the "new poor" will be paid the statutory minimum wage (£6.31 an hour) and not much more.

For vivid evidence of what life is like for them, you could do worse than go to the website of the Living Wages Commission.

People were asked to describe how being paid less than the "living wage" (£7.65 an hour outside London) impacted on their lives. John said that he loved his job and that he even cycled 20 miles each way to work to save £9.00 a day on travel.

He added that he was 44 years old and that getting £7.20 an hour made things very hard other than to just scrape by, leaving no chance of saving for the future. He said he earned the same wage 13 years ago and nothing has changed other than the cost of living.

Unfortunately, there is no end in sight. The new digital technologies will go on saving labour. Globalisation will continue to turn the world into a vast single market so that work can be done anywhere. Developing countries will go on bidding up the price of food commodities as they become richer.

As a result, wage rises are likely to continue lagging behind price rises for a considerable period – real incomes falling, as the economists would say. In the case of the old, advanced economies of the West, this also means that the gap between the haves and the have-nots will widen and poverty will become ever more pervasive. And one has only to list these factors to see that governments have little power to change these trends.
The Independent



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