The missing dimension of poverty: stigma

The experience of the social stigma around poverty is real, measurable and crucial.

The government’s consultation on developing a new measure of child poverty closes today. Their argument for moving away from the existing (mainly) income-based measure is that poverty is a “multi-dimensional” concept. Few would disagree: the problems arise when people use the notion of “multi-dimensionality” as cover for trying to import their pet concerns as “dimensions” into poverty measurement. The consultation document asks in all seriousness for views on such “dimensions” as drug addiction and family stability, which suggests that the methodology for identifying dimensions is to ask the staff at the Centre for Social Justice to free-associate on the words “child poverty”. (In fairness, it also asks about more reasonable candidates, such as levels of indebtedness.)

Yet in all the talk about the “multi-dimensional” nature of poverty there is one aspect which is never mentioned, even though it is a “dimension” of poverty in the truest sense, it is measurable, it concerns the lived experience of poverty as the government requires of poverty measures, and it is something that we all intuitively understand. This is the social stigma associated with poverty.

Stigma is the external, social counterpart to internal feelings of shame, worthlessness and moral inferiority. Shame is what individuals feel: stigma is the imposition by others of a shameful identity. And to be poor has, almost throughout human history, entailed a particular vulnerability to the imposition of shameful identities. Indeed Amartya Sen has argued that shame is at the “irreducible absolutist core” of the idea of poverty.

Would anyone seriously deny that stigma in this sense is absent from the experience of poverty in the UK today? These are the words an unemployed benefit claimant rattled off to describe how he felt claimants were perceived in a focus group last year: ‘OK, ermm...parasites, skivers, work-shy, lazy, stupid, feckless’.

These words are echoed in countless studies of the experience of poverty in the UK. Does anyone think that the exposure of parents to this sort of stigma has no effect on child wellbeing? (If you do, read this by Anna Hedge)

Mainstream research on poverty has often shied away from the issue of stigma. Indeed purging the idea of poverty of associations with shame and moral condemnation and replacing it with objective measures was an explicit aim of much of the best research of the 20th century, which in turn has influenced the definitions of poverty used by governments and international organisations. But recent research by Robert Walker and colleagues not only supports Sen’s argument that poverty is inextricably linked to shame across societies: it suggests that to ignore stigma is potentially to miss out on some of the most corrosive effects of poverty.

Their work shows that the stigma of poverty doesn’t just cause painful emotions to the individuals on the receiving end. It leads to social isolation as people try to avoid situations where they might be labelled. This can reinforce exclusion making it even harder to escape from poverty. And stigma undermines social cohesion. Not only does it encourage the majority to wash its hands of social problems by blaming individuals: a recurrent finding in research is that people in poverty themselves seek out others to stigmatise in order to differentiate themselves from imposed shameful identities. There was an excellent account of this happening among benefit claimants in this piece by Fern Brady earlier this week.

So social stigma is associated with poverty at deep level, and has potential negative consequences for the individuals who experience it and for social cohesion. At the same time, despite the fact that the association seems to be very widespread across cultures, we have no reason to believe that the level of stigma is invariant, either between countries or over time, or that it is immune to public policy interventions. Indeed reducing stigma has long been an explicit goal of much social security policy, including Beveridge’s 1942 plan. Often, the motivation for this has been instrumental: to increase take-up of benefits. But it is also arguable that the stigma of poverty is a social evil that should be addressed in its own right, along with and as an integral part of any strategy to reduce poverty.

So my suggestion is that if government is serious about addressing poverty in all its dimensions, it should start measuring the level of poverty stigma (it should not, however, try to combine measures in a single index, for the reasons set out by the IFS). How this should best be done raises all sorts of issues, but it is not a question of starting completely from scratch. Previous research has shown that stigma can be measured through direct attitudinal research, or by looking at the prevalence of erroneous negative beliefs about people in poverty – by way of example, the fact that the public believes more than one in four benefit claims are fraudulent when the true figure is less than one in thirty. No doubt many other approaches are possible.

Measuring stigma levels would also, it is to be hoped, impose some discipline on ministers and politicians of all parties who, consciously or otherwise, make use of stigma as a rhetorical device in argument or in the presentation of policy. Examples have abounded over recent years (not just under the coalition)- indeed it is arguable that the consultation document on measuring child poverty, with its stress on drug and alcohol dependency, is an example. When Ben Baumberg Kate Bell and I researched benefit stigma last year for the charity Turn2Us, we came to the conclusion that the level of benefits stigma cannot be divorced from the statements of politicians and the way they are picked up in the media. That may be true of poverty stigma as well. If so, a government committed to a multi-dimensional approach to poverty would benefit from a measure that would indicate whether things were getting worse or better on this crucial dimension- and encourage it to ask about its own role in any worsening or improvement.

Photograph: Getty Images

Declan Gaffney is a policy consultant specialising in social security, labour markets and equality. He blogs at l'Art Social

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/