Policy Brief: Poverty

Posted on December 8, 2008

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Policy Statement
Governments should adopt policies that secure for all persons an income sufficient to avoid absolute poverty, that provides all persons sufficient opportunity to avoid relative poverty, and that also eliminates the short- and long-term effects of poverty.

Poverty’s two aspects

  • The material conditions of poverty can and should be distinguished from its physical, psychological, and sociocultural effects (e.g. ill-health, poor sense of self-worth, racism and/or classism, and social exclusion).
  • A government can eliminate the material conditions of poverty without necessarily, at the same time, eliminating poverty’s longer lasting effects.

Poverty’s two definitions

  • Absolute poverty exists when a person cannot access the basic goods and services necessary to sustain herself and her dependents and develop her capacities and the capacities of her dependents.
  • Relative poverty exists when a person cannot access a typical (i.e. average or median) set of goods and services.
  • Absolute poverty can be eliminated even as relative poverty increases. Absolute poverty can exist even when relative poverty does not.
  • For example, between the mid-80s and 2000, in OECD countries, absolute poverty declined significantly and relative poverty increased slightly.

Poverty’s elimination requires :

  • Life-long education/learning geared to employment and/or proprietorship.
  • Employment and/or proprietorship.
  • Direct income support.
  • Programs to eliminate the effects of poverty.

An effective policy program requires:

  • An integrated cross-department approach (i.e. all government policy should be evaluated with respect to its effect on poverty).
  • Specific, measurable targets, and timelines.
  • Consultations with all stakeholders, including the poor and the organizations working directly with them.

Policy Proposals

  1. Earmarks funds or create incentives to ensure life-long access to education and training.
  2. A publicly-funded, tax-free, and indexed guaranteed income sufficient for a person to avoid absolute poverty.
  3. Working tax credits to address relative poverty.
  4. A substantial child tax credit to address child poverty.
  5. Eliminate all tax for persons living in absolute poverty.
  6. Fund and regulate (but not necessarily administer) programs to combat the short- and long term effects of poverty.
  7. Fund and regulate (but not necessarily administer) early child care.
  8. Eliminate corporate and small business tax, the minimum wage (assuming a guaranteed basic income is introduced), and eliminate payroll taxes.
  9. Replace income tax with consumption taxes (assuming all tax associated with consumption below the poverty-line is eliminated).

For more of my political commentary, click here.