THE BLOG

A Little Something About Those Child Poverty Figures

17/03/2017 10:57 GMT | Updated 17/03/2017 10:57 GMT
Phil Noble / Reuters

When some statistic that we're all supposed to be shocked and disgusted by is trundled out it's always worth pondering upon what the statistic actually is:

The upward trend in child poverty in the UK has continued for the third year running, with the percentage of children classed as poor at its highest level since the start of the decade, latest official figures show.

Child poverty is an emotional term but it does not mean waifs about to be stuffed up chimneys in order to earn their daily crust:

About 100,000 children fell into relative poverty in 2015-16, a year on year increase of one percentage point, according to household data published by the government on Thursday. About 4 million, or around 30%, are now classed as poor.

This is relative poverty. Children living where household income is below 60% of the median, adjusted for household size - and usually measured after housing costs. This is not a measure of poverty of course, it is a measure of inequality. And as such there's a point or two that can be made about it:

The Institute for Fiscal Studies said income for working-age adults was no higher than eight years ago. Inequality and poverty remain slightly lower than before the financial crisis.

Recessions cut inequality and therefore, bizarrely, cut poverty by this measure. It is profits and capital incomes which fall fastest and furthest in a recession, meaning that it is the richer, where such are concentrated, who lose most. This compresses inequality. And as the recession recedes then it is capital incomes which grow again, increasing inequality.

We're thus using a very odd measure of poverty here, one which shrinks as we all get poorer (a recession does do that) and grows as we all get richer (a boom does do that).

However, we can go further than that too:

The data showed that nearly half of single-parent children are poor, with a noticeable surge in poverty over the past year among children of lone parents who work full-time.

Note again what our measure is here, it's household income. One which we might think is going to be lower where there's only one potentially working adult rather than two. And 25% of households containing children are headed by a single adult, 75% by a married or cohabiting couple. Their working arrangements being:

In spring 2004 most working-age families with dependent children (couples and lone parent families combined) had at least one resident parent in employment (84 per cent) and a half had two parents in employment (50 per cent).

The median income is, as we know, where 50% of households, assuming we are measuring median household income of course, where 50% of the units are below, 50% above. 50% of UK households with children in have two adults working, 50% have only one or perhaps none.

It is not hugely surprising that a majority of the children in families with only one potential bread earner are in households with income significantly below the median given that modal set up of the two earner family.

At which point what is our child poverty statistic really telling us? Britain has a certain amount of inequality, a little less than it had eight years ago but rising again as we climb out of the effects of the recession. This may or may not worry you. It does not particularly worry us.

Britain's child poverty is also, in large part, caused by measuring it against median household income, something which is naturally going to be lower in single parent households where the norm is two earner households. This also does not worry us very much on the grounds that if people prefer to live their lives this way then who are we to gainsay them? This is not widows struggling to bring up their semi-orphaned children after all.

It also poses something of a policy problem - if it is single parenthood where this dreadful child poverty, that inequality, problem is concentrated then what actions should be taken about it? Anyone up for returning to the social pressures of old where the insistence was upon two adults raising children?

No, us neither even though that would seem to be a solution which would largely solve the problem being complained about. Ourselves we say leave people to make those decisions as they will for we are in fact liberals. We just have to put up with the resultant inequality of incomes in households containing children.

What we can't see as being quite just is to tax those doubling up that child raising duty in order to provide for those who eschewed that choice. To tax to relieve actual poverty, deprivation, yes, we can see that, but not inequality brought about by choice.

Tim Worstall is a senior fellow at the Adam Smith Institute

This blog first appeared on the ASI site, and can be read here