POVERTY: UK potential poverty following reduced benefits

Larry Elliott The Guardian, 13 May 2011
Institute for Fiscal Studies says 300,000 children will be pushed below poverty line due to reduced state benefits and tax credits.


The Institute for Fiscal Studies warns that child poverty is likely to rise again due to spending cuts. Photograph: Save the Children

Britain's leading financial thinktank warned on Friday that 300,000 children would be pushed below the poverty line in the next three years as the government's spending cuts reversed the improvement during Labour's last years in power.
The Institute for Fiscal Studies said that after falling to its lowest level in 25 years, child poverty was likely to rise sharply owing to George Osborne's decision to cut the generosity of state benefits and tax credits.
In its analysis of the latest official figures, the IFS said despite 200,000 fewer children living below the poverty line in the year to the 2010 general election, Labour had missed its ambitious target for halving the total by a wide margin and after 13 years went into opposition with income inequality at its widest since modern records began in 1961.
The annual Households Below Average Income data from the Office for National Statistics showed that 20% of children were living in families where income was less than 60% of the national median before housing costs in 2009-10, compared with 22% the previous year.
"The fall in child poverty is likely to reflect the above-inflation increases in benefits and tax credits that year," said the IFS. "These increases partly reflect policy decisions by the last Labour government but were mainly driven by falling inflation.
"However, child poverty would still need to fall by a further 900,000 in one year to meet the previous government's 2010 target of halving child poverty."
It said child poverty would have fallen by a quarter since Tony Blair set the target in 1998-9 of abolishing it within a generation and halving the total by 2010.
It added, however, that the total was now set to rise. "Research by IFS economists suggests that child poverty will increase by around 300,000 by 2013-14, driven largely by cuts to the generosity of benefits and tax credits by the coalition government," said David Phillips, senior research economist at the thinktank.
The IFS said pensioner poverty when Labour left office had only been lower in two or three years during the past 50 years, and that average take-home incomes had increased during the recession even when inflation was taken into account.
Increases in benefits and tax credits were cited by the IFS as the likely reason for rising incomes, but it said the growth could not be sustained. "The outlook for incomes in 2010-11 is considerably bleaker, with the long-term effects of the recession on living standards delayed rather than avoided," said researcher Wenchao Jin.
Iain Duncan Smith, the work and pensions secretary, said the return on Labour's anti-poverty spending had been poor and that the figures showed no narrowing of the gap between rich and poor households.
"These statistics reveal the scale of poverty in the UK today. Millions of children, adults and pensioners are daily experiencing the crushing disadvantage that poverty brings. They are living at the margins of society, unable to achieve their aspirations and trapped in dependency.
"Such levels of poverty are unacceptable and today's statistics show that, despite huge expenditure, this has made little impact in helping the poorest.
"Vast sums of money have been poured into the benefits system over the last decade in an attempt to address poverty, but today's statistics clearly show that this approach has failed. Little progress has been made in tackling child poverty, society is more unequal than 50 years ago and there are more working age people living in poverty than ever before.
"A new approach is needed which addresses the drivers behind poverty and actually improves the outcomes of the millions of adults and children trapped in poverty."
Alison Garnham, the chief executive of Child Poverty Action Group, said: "It is great news that child poverty fell during what was a terribly hard year for families and the economy. The investment in extra support for low-income families worked, which means British people will avoid some of the social and economic costs that followed the recession and cuts in the 1980s.
"The fall in material deprivation for children after the worst recession for decades shows that direct financial support for families improves children's wellbeing, even in tough times.
"These are the final figures for the previous government's time in office. David Cameron must keep his promise to make British poverty history and make sure the fall in child poverty continues."
http://www.guardian.co.uk/society/2011/may/13/cuts-child-poverty-levels-increase

POVERTY: UK: Britain’s poor don’t’ regard themselves as poor

May 06, 2011
In this interview with Laurie Taylor, Tracy Shildrick describes how Britain’s poor don’t’ regard themselves as poor. “People don’t want to associate with the stigma associated with poverty” she says.
This is not a new phenomenon. In his English Journey, written in 1933, J.B. Priestley described poverty in Blackburn:
First house, an elderly couple. Long, toothless man, just got up and now sitting down to a bowl of sensible soup. This made by jolly woman who said: “Ay, there’s been lots worse off nor us”, and meant it. These two lucky. Man been out of work between four and five years. All savings went. Lived on 10s a week…
Lots worse off than them. They all say that.
Dissociating oneself from poverty, then, seems to be a persistent attitude of the poor - even those who we would regard today as absolutely poor.
This is an example of what Jon Elster called “sour grapes”. Our preferences adapt - partially - to our circumstances with the result that we don’t feel bad about our lives, however awfully they are going. This is a necessary coping mechanism. Counting your blessings is a way of keeping going in the face of adversity.
There is, though, a problem here. If people don’t sufficiently acknowledge that they are poor or are being mistreated by society, the demand for redistributive policies will be low. If this coexists alongside a desire by the rich to bash "scroungers" (via), then there’ll be a systematic bias in public preferences and discourse against the interests of the poor.
In this sense, there’s a conflict between democracy and equality. Social democrats are insufficiently aware of this.
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2011/05/dissociating-from-poverty.html

POVERTY: Suffer the Little Children: Poverty in the First World

CHARLES M. BLOW :  December 24, 2010
As we celebrate this Christmas with the sound of tiny feet rushing toward a tree to rip open presents, let’s take a moment to consider the children less fortunate — the growing number who live in poverty in this country.
  Damon Winter/The New York Times
Charles M. Blow

According to the National Center for Children in Poverty, 42 percent of American children live in low-income homes and about a fifth live in poverty. It gets worse. The number of children living in poverty has risen 33 percent since 2000. For perspective, the child population of the country over all increased by only about 3 percent over that time. And, according to a 2007 Unicef report on child poverty, the U.S. ranked last among 24 wealthy countries. This is a national disgrace.
Yet the reaction to this issue in some quarters is still tangled in class and race: no more welfare to black and brown people who’ve made poor choices and haven’t got the gumption to work their way out of them. The truth is, neither the problem nor the solutions are that simple.
Yes, the percentage of blacks, Hispanics and American Indians living in low-income homes is about twice that of whites and Asians. This raises unpleasant cultural questions that must be addressed. But that’s not the whole story. Despite the imbalance, white children are still the largest group of low-income children.
Furthermore, the British may have created a road map for us that dramatically reduces child poverty while not relying solely on handouts. A report released this month by Jane Waldfogel of Columbia University and the London School of Economics paints a fascinating portrait of how smart policies and targeted investments in that country have produced stellar results.
In 1994, about 30 percent of British children were below the country’s poverty threshold. Fifteen years later, that number has fallen to 12 percent. Over that same time, the number of American children below our poverty line slipped a bit then rose again as the economy turned sour. It is now approaching its 1994 level.
How did the British do it? It was a three-pronged attack.
First, they established a welfare-to-work program and a national minimum wage (which, at about $9, leaves ours wanting) and instituted tax reductions and credits for low-income workers. They made work more attractive, and people responded. The report said, “Lone-parent employment increased by 12 percentage points — from 45 percent to 57 percent — between 1997 and 2008.”
Second, they raised child welfare benefits, especially for families with small children, whether or not the parents worked.
Third, they invested directly in the lives of young children with things like doubling paid maternity leave, providing universal preschool, assisting with child care and allowing parents of young children to request flexible work schedules.
The British example shows that child poverty is not an intractable problem. If we can rise above the impulse to punish parents and focus on protecting children, we might replicate Britain’s success.
http://www.nytimes.com/2010/12/25/opinion/25blow.html?hp