How some countries measure poverty

The Straits Times

 UNLIKE many developed countries, Singapore - along with Canada, New Zealand and South Korea - does not have an official poverty line. 

Singapore does have some estimates on numbers of the working poor, but there is no publicly available government data on how many non-working households there are who can be considered poor. Still, data on how many people fall below a certain level of income is useful as it is a simple yet effective gauge to track numbers of people who might need financial help - and whether their ranks are growing. This is why even countries that do not have official poverty lines, have unofficial ones.

Take Canada. Rather than a single line - which has obvious flaws - it has a more complex and comprehensive method of tracking numbers of the poor. A spokesman for the Canadian government's statistics agency told The Straits Times that it has three different benchmarks to measure how many "low-income" people there are at any given time. 

The first is the Low-income Cut-offs. These are income thresholds below which a family will likely devote a larger share of its income on basic necessities, such as food and clothes. The country keeps meticulous data on how many working and non-working poor fall below these thresholds. It is not a single income level, but is fine-tuned depending on a host of factors such as whether the person lives in an urban or rural area.

The second, the Low-Income Measure, is 50 per cent of the country's median family income, adjusted for family size.

The third, known as the Market Basket of Measures, measures disposable income.

These are treated as "de facto poverty lines", the spokesman said.

At last count, in 2011, there were between three million and 4.2 million Canadians - or between 10 and 12 per cent of the population - who were considered "low-income".

Absolute or relative?

OVER time, the way poverty has been defined globally has evolved and there are now three broad methods - absolute, relative and subjective.

Absolute poverty is the most simplistic. It fixes a level of income, below which it is deemed that the person or family is poor. In developing countries, the World Bank defines the absolute poverty line at US$1.25 (S$1.55) a day, and has set it at US$2 a day for middle-class developing countries. But it gets trickier in developed countries. The US has an absolute poverty threshold set at three times the cost of a minimum food diet in 1963 updated annually for inflation. But these absolute measures tended to have fluctuating numbers of poor depending on recessions and economic booms, according to economist Michael Forster from the Organisation for Economic Cooperation and Development (OECD).

Relative poverty is a measure more often used in developed countries, as it is set in the context of the overall distribution of income in a country. The OECD sets the mark at half the median household income, while Britain and Taiwan have thresholds at 60 per cent of median household income. But relative definitions of poverty, by definition, mean that some people will always be less well-off, regardless of how affluent a society becomes. So policymakers have to look at other yardsticks to ensure that the less well-off are not falling further and further behind those surging ahead, with some landing in a condition of being in dire need.

Subjective poverty, a newer concept, asks what it feels like to be poor, taking in cultural and societal attitudes to being "poor". This has led to new and more nuanced ways of measuring poverty, said Ms Sanushka Mudaliar, senior manager at the Lien Centre for Social Innovation. These include multi-dimensional poverty measures with indicators for poor health, lack of education and disempowerment; and an index used by the United Nations which tracks exclusion from social services, and civil and social life.

Yet another is Participatory Poverty Assessments, which involve engaging the community in creating a definition and measure of poverty that aligns with their experience, she added.

Some might argue that since relative poverty will always be a concern, the poor will always be with us. While that might be axiomatic, it should not distract society from seeking to understand the underlying causes which keep some members from breaking out of poverty and trying to give them a leg-up.

As Singapore strives to become a more fair and just society, one which is plugged into a fast- changing globalised economy, the key to maintaining its social cohesion will be efforts that are made - by Government as well as individuals - to help its weaker members stay with the pack that is racing ahead, rather than have them fall further behind.

According to latest official data, 10 per cent of Singapore's resident households, comprising an average of 3.5 members and with at least one working person, earn an average of $1,644. This figure is all the more surprising given that Singapore has one of the world's highest annual incomes per head, of $65,000.

Singapore has no official measurement of what constitutes poverty here, but the Department of Statistics found the average household expenditure on basic needs to be $1,250 a month for a four-person household two years ago. This is average spending on food, clothing and shelter for those living in a one- to two- room flat, according to a paper to be released by the Lien Centre for Social Innovation.

Given Singapore's rapid economic progress over the decades, poverty is a phenomenon that many do not encounter personally, or tend to wave aside because it is not part of their daily consciousness.

Indeed, in 2001, Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, declared that Singapore had eradicated poverty. "There are no homeless, destitute or starving people in Singapore," he said, in remarks that some considered too sweeping.