From the TUC

Myths about child poverty measurement

23 Nov 2012, by Guest in Society & Welfare

The Government launched their consultation on child poverty measurement last week. The consultation proposes a new ‘multi-dimensional’ composite measure of child poverty that captures the broad nature of poverty and reflects the ‘lived experience’.

The view that we need a full and broad understanding of child poverty is to be welcomed. We know from our work across the UK that children need decent family incomes and access to good early years services, schools and housing conditions and it is right that child poverty measures reflect all the things that children need in order to thrive.  

However, this should not mean a move away from the centrality of the four income measures as set out in the Child Poverty Act and, in particular, the main relative income measure (which defines poverty as those living below 60% of median incomes.) Income is central to the lived experience of poverty and it is the one thing that is common to all those experiencing it. I’ve blogged here before about the importance of relative income to understanding child poverty in a developed nation like the UK .

In responding to the consultation it is crucial that the debate about poverty measurement is framed in the right way. The consultation repeats a number of criticisms of the relative income measure without reflecting its strengths.

The following addresses some of the myths and commons misconceptions about efforts to reduce child poverty and child poverty measurement which we will be feeding into our consultation response.

Myth 1: Efforts to reduce child poverty have failed

The progress made in reducing child poverty in the last 15 years suggests that this wasn’t the case:

  • Around 1 million children were lifted out of relative poverty between 1999 and 2010.
  • Absolute child poverty fell from 3.4million to 1.4 million children between 1999 and 2010.
  • The number of children experiencing material deprivation fell by 300,000 between 2005 and 2010.

Progress (during the same period) against other measures, such as the educational attainment gap between rich and poor children or teenage pregnancy rates, suggests that it is possible to take positive steps across a range of related areas, whilst also making progress in reducing child poverty. 

Myth 2: Child poverty has only fallen because middle incomes have fallen

The consultation on child poverty measurements repeats several times that relative child poverty fell in 2010/11 because middle incomes fell faster than incomes at the bottom. However it is also important to recognise that the longer term falls in child poverty (set out above) occurred at a time of economic growth and rising incomes. In any case, middle incomes rarely fail and pointing solely to the exception (rather than the rule) isn’t overly helpful.

Myth 3: It isn’t possible to eradicate child poverty

The Child Poverty Act defines ‘eradication of child poverty’ as achieving a relative poverty rate of 10% or less (and meeting the other targets set out in the Act). This is perfectly possible. Child poverty rates below 10% defined in this way are achievable and have been achieved by other European countries.

Some have suggested that it is not technically possible to record a relative child poverty rate of 0%. The poverty line is based on median incomes; it is perfectly possible to lift all incomes above 60% of the median. Critics of the relative income measure often confuse median averages with mean averages.

Myth 4: The 60% median is a meaningless and arbitrary threshold

Drawing the line at 60% is accepted across academia and across developed nations. The links between material deprivation and living below 60% of median income are strong and the correlation between poor outcomes and children living on relatively low incomes is too strong to ignore.

Myth 5: During the last decade the relative income target only succeeded in lifting those just below the poverty line, just above it

Evidence shows that recent efforts to reduce child poverty benefited those well below the poverty line as well as those around the poverty line. This is discussed in detail in the IFS report, Child Poverty in the UK since 1998-99: Lessons from the Past Decade, which found that:

“Child poverty would have fallen over the period if the relative poverty line had been anything from 43% up to 100% of the median household income”.

In any case, it would be very difficult to focus increases in tax credits or Child Benefit in such a precise way.

Myth 6: Directly lifting children out of poverty can only be done by spending ever increasing amounts of money on out-of-work benefits

Whilst there is an important role to play by the welfare system in ensuring those who are out of work for a temporary period or who are unable to work are afforded a decent standard of living; driving down child poverty requires a broader policy approach. Recent successes in driving down child poverty have shown that supporting parental employment (with a particular focus on groups with specific barriers to employment, for example, single parents) and subsidising low paid employment are effective in reducing poverty.

There are 60% of children in poverty living in working households. Efforts to reduce child poverty aren’t just hampered by lack of investment in social security but by the prevalence of low paid jobs, particularly in the sectors that can be accessed by those who have to juggle family responsibilities

Myth 7: Giving extra money to families just results in it being misspent by parents

Providing extra financial support to low income families results in money being spent directly on children. According to Why Money Matters low income parents are more likely to spend any extra income that comes into the household on their children compared to better off parents. Low income parents tend to prioritise the needs of their children above their own.

Myth 8: Increased spending on income transfers has no impact

Targeting extra financial resource at low income families can have an immediate impact on living standards and well-being and support children to realise their rights. Targeting extra financial resource at low income families can have a direct impact on a range of important social policy areas, and, where it supports households into work, the financial benefit to the household is greater than the direct income transfer.

Further information:

Save the Children’s report on the importance of relative income and income more broadly in tackling child poverty in the UK is set out here

The consultation ends on 15th February 2013