We’d all like to see poverty diminished if not entirely abolished. That’s why us neoliberals are so keen on this neoliberal globalisation stuff, it’s the one socioeconomic system that’s made decent inroads into absolute poverty. The percentage of humanity living on less than $1.90 a day has gone from over 40% to under 10% in only a few decades and we hope to abolish it in the next. You know, for the first time in the history of our species, which is pretty good going for a socioeconomic system, nu?
The problem though is that we’ve got to define what poverty actually is. The normal global number is that absolute poverty. Living on – not earning, this is the value of all consumed in a day – less than $1.90 a day. That’s at today’s American prices, imagine walking into Walmart and buying food,clothing, heat, medical care, housing even your pension contributions for the day, on under $2. That’s poverty.
This also isn’t a very useful number in the rich countries as it doesn’t exist and hasn’t for many a decade. We’ve simply not got global or historic poverty in any of the rich countries today. We could just say, well, job done, then go off and do something more interesting but then what would all the campaigners and politicians do? Which is how we end up with the concept of relative poverty. This is normally less than 60% of median household income after housing costs and adjusted to household size.
This is obviously a measure of inequality, not poverty. It’s also the one everyone means when they refer to poverty in a rich country other than the US – which has its own measure. The value here is that those who wish to complain about poverty always do have something to complain about. Even if we abolish actual poverty measuring inequality instead gives something to whine about.
Which brings us to those sensible people in Canada. They’ve just adopted – or the Act which will do so has been introduced – their first official definition of poverty. And it’s not one of those relative measures, it’s an absolute one:
The federal Liberals have unveiled their long-promised anti-poverty law, saying it will force future governments to meet ambitious targets to lift more than two million people above the poverty line in the coming years.
These targets would see poverty rates lowered by 20 per cent from 2015 levels by the end of the current decade and a further 50 per cent reduction by 2030.
OK, but what are they measuring?
Until now, discussions of poverty reduction have focused on three different ways of measuring poverty. Tuesday’s bill selects one of those – the market-basket measure – as Canada’s official poverty line.
The market-basket measure is focused on the cost of buying basic goods and services such as food, clothing, transportation and shelter.
And in more detail:
The advantage here is that economic growth will see that poverty measure reduce over time. Simply because a richer economy means richer people, fewer of whom are poor in absolute terms. As opposed to those measures of relative poverty which always rise in recessions. For recessions make an economy less unequal, but using that as a poverty measure means that when all get poorer then poverty reduces. Nonsense, of course, which is why the absolute measure is better.
This is very sensible and well done to the Canadians here.