Tuesday, 11 December 2007

Intellectual Poverty

(Is it a wonder that most blog posts are fatuous? Bloggers must surely expend most of their mental energies thinking up suitably punnishing titles - I know I do!)

I find the current discussions on child poverty infuriating. The notion of 60% of median as a floating scale for child poverty is, frankly, bonkers. We should be looking at how much it costs to actually house, feed, clothe, etc a child today. If a parent doesn't have that much money to spend on their children, then those children should be definitionally "in poverty". Otherwise not. Okay, it may be that right now, 60% of today's median income corresponds to enough income to feed oneself and one's children, but in five, ten years?

Second, I don't really believe that 1 in 3 children in the UK live in poverty by any sensible definition of the word. Hardship? Sure. But starving? Or living without heating or electricity? I find that very unlikely. Is this figure being calculated *before* benefits are paid? If so, then no suprise that the figure is going up.

Fortunately, there's a very easy way to end child poverty: it's called a "Citizen's Income". Pay everyone a CI, and pay <16-year-olds a half-share. A 2-parent, 2-child family then receives £18k at a CI of £6k. Oh, hey, that's way bigger than the £12k that is currently 60% of median income.

And you free parents from the benefits trap that keeps them at home, hopefully increasing economic activity all round (particularly if the minimum wage is abolished and the restrictions on childcare reduced).

Finally, if the kids' half-shares are actually full shares, but with 50% going into a trust, then every child will have ~£45k (in today's money) available at age 18 to give them a real start in life. Okay, so 18-year-olds can be irresponsible, so we might limit the uses of the trust to educational (etc) purposes until age 30. This frees children from the fear of getting into huge debt through a university education, whilst also making them think sensibly about what to spend the money on.

I know Mark's going to pop up and disagree with me here, on the basis that we should be keeping things simple, but I think that sometimes a compromise is worthwhile if it provides good outcomes. I think that a stakeholder grant of this form would disproportionately benefit the poor whilst solving the funding problem for universities, amongst other things, and so I believe that it would be really worthwhile.


A separate thought on child poverty and attainment: children who are born to richer, older parents do better than those born to younger, poorer ones. One might naturally think, therefore, that one should incentivize parents to have children later and richer by making the monetary rewards for bearing children later and richer be greater. However, it seems awfully unfair to thus disadvantage children born to poorer, younger parents, through no fault of the child themselves. Part of the problem, I suppose, is that it's pretty hard to distinguish between money going to the children and money going to the parents from an institutional point of view.

How about a one-off bonus paid to every couple, of £250 per year past age 20 (capped at £3000) of the mother's age at the birth of her first child (age 21 = finished uni!). Not enough to materially affect the child's development, but perhaps enough to encourage everyone to wait for as long as possible? (£2.5bn a year, tops. Peanuts in terms of government spending!)


Matthew said...

The figures used for Citizen's Income look to me to be worryingly high to be pretty much unconditional. Would that really enhance economic activity, especially if the minimum wage were abolished?

I know the different kinds of deprivation often go hand in hand with one another, but just because a child is in material poverty does not mean that it is not emotionally wealthy. And vice versa - just because a family has a bit of money doesn't mean that it is being spent wisely or that the child is receiving care, love, and attention. Just what is the correlation between the material wealth of a child and the emotional wealth that child receives?

The 60% measure is probably a useful way of looking at income equality but not really of measuring whether or not a child is going without. Surely a 'basket of goods' approach would be a better measure of a child's deprivation?

OFMN said...

The government has wasted £21bn on a shit company making a shit computer program that has made the NHS even more shit. I agree, 2.5bn squids is peanuts if it means life gets better for poor children and their families.

matthew. A study came out today that suggested intelligent, materially poor children do worse off than less intelligent, well off kids. Surely a bit of cash wouldn't hurt?

sanbikinoraion said...

Matthew, £6k was just an example figure. Shorthand for "subsistence income".

Also, my 12k figure is off. Median pre-tax income is ~£22k per person, atm, average household post-tax, post-housing post-loan repayments is ~£13k.

sanbikinoraion said...

And Matthew, I totally agree with your final paragraph.