Are You Really That Poor ?

Given the recent media and political coverage on poverty I wanted to look at what being poor in the UK actually means. I just didn’t buy the story that there are that many poor people in the UK. OK so the bottom 10% of the population may struggle to live the full western lifestyle but when I look around me the only truly poor people in the UK seem to be those who have been victims of extraordinarilly unlucky circumstances as a result of crime, location or health.

Initial research started with government figures showing the poor are classed as those on less than 60% of the national average wage

• Average UK wage is about £23k
• Average UK household income is £35k (at 1.5 persons per household)

60% of these numbers are £14k and £15k per capita respectively. So assuming an average income of below £15k per capita means you are officially classified as being poor. That isn’t a bad income at all and surely it’s not really poor… or is it?

We Need Better Stuff Not More Stuff
Given that western lifestyle and success revolves around status and possession of assets, another thing that keeps bugging me is that of quantifying wealth factors that make you feel more or less happy. I feel this fall under two banners:

• For the Wealthy
• More money brings little further happiness
• Companionship and altruism bring a great deal more happiness
• For the Poor
• More money brings a great deal more happiness
• Companionship brings little further happiness

So what does this mean? Maybe it means that we would like better stuff not simply more stuff. So what “Better Stuff” do we need? Are these things always material? For both rich and poor more money nearly always brings greater status. I have read that higher status in society leads to longevity and this is an important topic for another discussion. And more complex, does status influence happiness as well as make a claim on longer life.

The Happiness Threshold
I then started to look for the threshold where more wealth brings little further gain in happiness. Some would say there is no ceiling. Research found the following.

The Observer happiness threshold is around £25k. Another source puts the happiness threshold at £10k (needs reference). The UK National Minimum Wage is around £11k. And Alter.Net March 23 07 claims “money consistently buys happiness up to $10k income per capita. So the consensus on a happiness threshold (excluding the Observer) is lower than the UK poverty threshold qnd about the same as the UK national minimum wage. Interestingly therefore the UK government seems to be saying you can be poor and still be happy.

UK Poverty Compared to the Developing World
So how does UK poverty compare to the poorest in the developing world. Well 3rd world poverty, classified generally at less than $1 per day, or about £0.54 per day and £200 per year. This amounts to just 2% or 1/50th of the UK National Minimum Wage! Now you could say we have found some really poor people and we are converging on my point. Therefore even the “happy” UK poor are “wealthy” on a global per capita basis. No wonder they are “happy” when they are earning 50 times what real poor are earning. You could argue that the developing world needs much less cash to keep the lights on but they often don’t have lights anyway. Finally on this, in 1820 an American family lived on $1500 per year in current money, close to current averages in Africa. Ref Alternet Mar 22 07. A sobering thought.

A Place of Your Own
Another whinge factor in the UK lately is the access to a mortgage for our “poor” hard done by population. People are claiming it’s so hard for people to get on the property ladder today. And the biggest moaners do not seem to come from poor backgrounds here, most of them are middle class. But I know people who had trouble 25 years ago and did not complain as much. One example earned less than her mortgage and had to borrow from her Mum to keep the payments going and this was not considered abnormal at the time apparently. Recently I read someone complaining they only had about 20% of their earnings left over after essential expenses. Only 20% left to spend on "stuff" poor things! Is it the deposit or the interest/payments they mean are impossible? Or is it most people get peeved if they don’t have enough disposable income after house, food and transport has been covered to spend on stuff to maintain a decent level of status anxiety. This is the nature of our society I guess. How will this look to future generations.

Realtive Jealousy
I think this delta between minimum wage and average wage is what the Lib Dem politicians have been claiming is “Relative” poverty. The level below which social unrest commences due to… what exactly? Jealousy? Real poverty has been confused by this political agenda and is known as “Absolute” poverty as in 3rd world or significantly bleow minimum wage here in the UK. As a result of all this data I decided to personally undertake a short experiment to see what it felt like to live on minimum wage of about £970 per month. I did this for 6 months and found it straight forward and easy. The only downsides were some definite discrimination, folks looking down their noses at my obviously poor lifestyle and missing out on most of modern society’s luxuries. Most surprising was how embarrassed (or jealous) it made me feel about those so openly displaying their wealth via typical badges of status. They seemed rather insecure individuals all of a sudden.

Its Not About Being Poor Then
As a UK citizen, I temporarily conclude that living on 11k is not living as a poor person at all. It just means you get fewer luxuries and need to deal with some rather arrogant human behaviour from time to time. And maybe we treat those with relative poverty as second class citizens, unofficially of course. Essentially this means the worse off are being discriminated against, its “poorism” in other words. These folks may then get caught in a viscous cycle of criminalisation to boot.

We Live Like Kings
Something I intend writing about at another time is on the wealthy who often claim they have made success through merit alone. I don’t believe it’s that simple and much success is pure luck though heritage and genetics even today. Some of us are born with higher IQ potential than others, thats not skill, its luck and those lucky enough could use some magnanimity. Even if you are unfortunate enought to lose your job you will still live the life of a king relative to the majority in sub sahara. Think about it!

So our politicians need to think a little more carefully about poverty and what it means… and in the mean time make sure those in the 3rd world don’t hear us talking until we have a more selfless story to tell.