Poverty in the western world

A generally dull number of the NYRB this week, that is to say a lot of good solid stuff, but stuff which did not interest me.

However, there was some interest, including this piece built around a couple of books about poverty.

It seems that most western statisticians define poverty as a proportion of median disposable income, commonly a third or less in the US and two thirds or less in the more egalitarian Europe. The first point in interest is that this is a relative measure: it is not about how many refrigerators you can buy, or about how much stuff you can afford to put in your refrigerator, more about how many more or less refrigerators you can buy than your average neighbour.

But a measure which fluctuates over time, which wanes and waxes. Presently waxing with between 10% and 15% of people in the US being below the poverty line, with the exact number depending on the details.

The second point of interest was that income has become increasingly variable over time. So while there are a lot of people who are poor all the time, there are maybe twice as many people who are poor some of the time. And generally speaking, for a given level of average income, people on a varying income find it harder to manage than those on a steady income.

Part of this story is a transfer of risk from capitalists to workers. Fifty years ago, most workers - and workers accounted for a large proportion of the working population, guessing, say more than 75% - and the income of workers was reasonably steady. There were lay-offs and there was short-time, but, in the round the capitalists absorbed a lot of the costs and risks of business cycles, of the day-to-day fluctuations in the level of business. There was a pooling of risks. While now, an increasing proportion of the working population is self-employed and an increasing proportion of those who are employed are on variable hours. Costs and risks have been transferred from the capitalists to the workers, from society at large to individuals.

Which is fine for those of us who have the money. The stuff we buy is cheaper than it might otherwise be. There is, as it were, no insurance premium included in the price. But the people who make the stuff don't have the money.

PS: another villain in this story is ICT. Without modern information and communications technology, all this flexi-working would not be on at all.