Child Poverty

Child Poverty

Child Poverty

Introduction

Labour's child poverty initiative is motivated by the general rise in inequality in the U.K. over the last twenty years and in particular the deterioration in the circumstances of Britain's children relative to other groups. The Prime Minister's pledge to end child poverty has not been formally translated into a specific numeric target, as there is no official standard poverty definition in the U.K. However, the government currently produces a range of indicators covering relative incomes, absolute incomes, deprivation, and worklessness, all of which are related to child poverty (Dept. of Social Security, 2000b).

The most commonly used U.K. standard, and the preferred indicator of poverty in the European Union, identifies as poor those households with incomes (adjusted for household size) less than 60 percent of the national median income. Income is adjusted (“equivalised”) for household composition1 and is calculated before and after subtracting housing costs. Special attention is accorded housing costs because of problems posed by regional variation and comparing expenses for homeowners and renters. Using the after-housing-costs benchmark, 4.2 million (33 percent) of Britain's children were living in relative poverty in 1998. This was up from 1.7 million (14 percent) in 1979. In 1998, this benchmark corresponded to annual disposable incomes after deducting housing costs of £8,717 and £10,289 for a couple with (respectively) one and two children (HM Treasury 1999a). In 1999, the official U.S. poverty standards for the same families were $13,423 and $16,895.

Poverty and Worklessness in Households with Children

Over the last twenty years, children have replaced pensioners as the poorest group in U.K. society. While average incomes of the elderly rose in real terms, even among the poorest fifth, the poorest fifth of children in 1996 were in households with incomes no different in absolute terms than those reported for the corresponding group in 1979. Figure INCDIST shows how incomes for households containing children in the U.K. have fallen relative to others, such In the late 1990s, this relative poverty during childhood was almost evenly split between in-work poverty—where there is an earner in the household—and workless poverty- where there is no working adult present. In 1996, nearly 1 in 5 children lived in households where no adult worked, up from 7 percent in 1979 and 4 percent in 1968. Ninety per cent of these children were in the poor households that make up the bulk of the observed spike in ...