Poverty Trends in UK

Introduction

Poverty is a broad economic term that denotes a lack of the necessities for a quality of life. The developed and less developed countries LDCs) They are characterized by diverse levels of poverty. In spite of the prevailing differences, poverty reduction has become one of the core economic goals that the developed and less-developed countries are seeking to achieve (Islam, Minier & Ziliak 2015). The developed economies are focused on eliminating relative poverty, while the LDCs are concerned with reducing absolute poverty (Mahadevan 2007a). Absolute poverty is defined in terms of the prevalence of change in one’s economic situation over time, while relative poverty is defined in terms of one’s resources or income level about a predetermined average or threshold (Kao 2010).

Despite the fact that the UK ranks among the developed economies, the country is characterized by persistent poverty (Berthoud 2002). According to the Office for National Statistics (ONS), persistent poverty occurs if a household’s disposable income is below 60% of the country’s national median in a particular year (Office for National Statistics 2017).  Seymour (2013) views poverty as a symptom of deep and complex problems.

The prevalence of poverty might affect the UK’s economic growth. In recognition of this issue, the UK government is committed to reducing poverty in the country by promoting social justice (Balmer, Dineen & Swift 2011).  Understanding different aspects associated with the country’s level of poverty is critical in the UK’s achievement of this goal, hence improving the society’s quality of life (Lister 2004). This paper assesses the level of poverty in the UK by analyzing different aspects of poverty, including persistent and overall poverty. The analysis has been achieved by undertaking a comparative analysis between the UK and the EU.  

Data  

The UK has experienced a significant change in the level of overall and persistent poverty in the recent past, as illustrated by Table 1 below.

Diagrams and calculations: percentage change in the rate of poverty

On the basis of the data in Table 1, it is evident that the overall and persistent poverty in the UK has experienced considerable fluctuation, as evidenced by the percentage change in the rate of poverty year-on-year. 

Calculation of the percentage change in the rate of overall and persistent poverty is calculated using the formula illustrated in Appendix 1.

Commentary, analysis and interpretation

Table 2 and graph 2 indicates that the UK has experienced significant fluctuation in overall and persistent poverty levels from 2008 to 2015. The trend line indicates the percentage change in the level of persistent poverty while the bar charts denotes the percentage change in overall poverty. During  the 2008/2009 fiscal years, the country experienced significant reduction in poverty levels as indicated by the decline in overall poverty and persistent poverty by 7.5% and 5.88% respectively. However,   the level of persistent poverty increased remarkably in 2009/2010 by8.7% while overall poverty declined by -1.16% as illustrated by table 2. Generally, table 2 and graph 2 shows that the levels of poverty has varied considerably. However, statistical data from table 1 indicates that the UK is characterized by a slightly lower level of persistent poverty compared to the EU average. Nevertheless, overall poverty in the UK is relatively higher compared to the EU average. According to data collected on persistent and overall poverty, one can argue that the UK is characterized by prevalence in the level of economic inequality.  

           The gap between persistent and overall poverty in the UK shows prevalence of fluctuation in the level of income among households. This further indicates that the UK has not succeeded in implementing an effective social-economic policy to address the problem (Mahadevan 2007b).  According to Rycroft (2013), addressing persistent poverty presents a remarkable challenge for policy makers compared to dealing with poverty that arises from short-term changes such as economic downturn. Platt and Joseph Rowntree Foundation (2007) notes that persistent poverty translates into a social problem that requires a social approach in order to reduce or eliminate it.

Data collection process and issues

           The data used in this study is sourced from the Office of National Statistics, which is charged with the responsibility of producing national official statistics on different aspects in the UK such as the population and economy. In executing its mandate, the ONS gathers data from the field by undertaking extensive survey. This ensures that the data gathered is credible and hence reliable in making economic decisions. For example, in gathering economic data, the ONS undertakes periodic primary surveys on specific issues in order to develop a comprehensive understanding of the prevailing situation. In an effort to enhance data collection and processing, the ONS has implemented an extensive infrastructure, programmes and projects aimed at delivering credible statistics. Moreover, the ONS has developed a strong workforce to aid in undertaking research (ONS 2017).

Conclusion

     In spite of the fact that the UK ranks amongst the developed economies, the country is characterized by a substantial level of poverty as indicated by the levels of persistent and overall poverty.  Data collected from the ONS shows that the country continues to experience fluctuation in poverty levels. A comparative analysis of poverty levels between the UK and European Union shows existence of a slight difference between overall and persistent poverty levels. This indicates that the UK government has not succeeded in implementing a social policy to optimally deal with poverty in the country. The government should focus on both absolute and relative poverty as opposed to adopting measures aimed at dealing with short-term causes of poverty. In order to successfully eliminate or reduce poverty levels, it is imperative for the UK government to ensure that an optimal social-economic policy is formulated.

References

Balmer, B, Dineen, M & Swift, J 2011, Persistent poverty; voices from the margins, Between the Lines, Toronto.

Berthoud, R 2002, Symposium, analyzing the dynamics of social change in Europe, Duncker , Berlin, 2002.

Islam, T, Minier, J & Ziliak, J 2015, ‘On persistent poverty in a rich country’, Southern Economic Journal, vol. 81, no. 3, pp. 653-678.

Kao, R 2010, Sustainable economy; corporate, social and environmental sustainability, World Scientific, Singapore.

Lister, R 2004, Poverty, Polity, Oxford.         

Mahadevan, R 2007a, Sustainable growth and economic development; a case study of Malaysia, Edward Elgar Publishing, New York.

Mahadevan, R 2007b, ‘The poverty transition; when, how and what next’, Journal of International Development, vol. 19, pp. 1099-1113.

Office of National Statistics: Persistent poverty in the UK and EU 2015.

Platt, L and Joseph Rowntree Foundation, Poverty and ethnicity in the UK, Policy Press, Bristol, 2007.

Rycroft, R 2013, The economics of inequality, poverty, and discrimination in the 21st century, Praeger, Santa Barbara.

Seymour, J 2013, Poverty in plenty; a human development report for the UK, Routledge, New York.