policy

This week, Jim Murphy MP, UK Minister for Employment and Welfare Reform, is visiting parts of North America. His first stop is Washington DC and then he’s off to Milwaukee to learn about the Wisconsin “miracle”, then Canada.

Inclusion met with the Minister and his staff to discuss plans to increase UK’s employment rate and the UK child poverty reduction goal. He was most interested in our our national scan for new ideas to create better jobs. In particular, our findings on community benefit agreements and employee engagement strategies seemed to pique the interest of our UK visitors.

While Inclusion’s Mobility Agenda advisors - Heather Boushey, Shawn Fremstad, Rachel Gragg, Sarah Sattelmeyer, and me - answered many questions from the Minister, we also gathered some useful information for application in our work.

There’s been a lot of talk in the U.S. lately about copying the U.K. national target of child poverty reduction.

Our conversation yesterday confirmed what some of us have suspected for a while: the policy framework in the U.K. is fundamentally different in ways that make it quite difficult to imagine replicating UK poverty reduction here.

There’s a great deal to say about this – but let’s just start with the fact that in the UK, poverty is defined quite differently from the U.S. and was defined at the time the goal was established. This suggests that the government knew where it wanted to end up and established the definition to match the true goal.

Poverty in the UK is relative – a percentage of median income – that is, anything below 60 percent of median, after subtracting housing costs. (Yep, that’s right – after housing costs.) This means that poverty is both a moving target – and designed to measure economic inclusion.

Whereas, our definition of poverty in the US is based on life as it was in the 1950s, when housing costs represented a much smaller part of a household budget, one income was enough to support most families, and child care costs weren’t much of a factor. The poverty rate in the US is adjusted annually, but only to reflect increased costs based on the original assumptions of what's in the basket of basic goods and services to prevent deprivation. This is a measure of hardship – tho not a very good one – not a measure of inclusion.

Moreover, in our discussion with the Minister about The Mobility Agenda – and new ideas for better jobs – it because quite clear that many of the policies and strategies we identified in our national scan are already in place in the UK: universal health insurance, for example.

In the U.S., we start in a fundamentally different place. If we establish a poverty reduction goal here, we cannot hope to accomplish what’s been done in the UK. For the UK, it seems to be the right goal, with a good measure, and some real success. In the U.S., it’s easy to imagine that establishing the goal of poverty reduction would have limited results, while undermining efforts to improve low-wage work and increase economic mobility.

We should consider whether it makes more sense to establish a national goal that takes into account the limitations of our poverty measure and the holes in our social infrastructure that make low-wage jobs so bad.

We should at the very least have full debate in policy circles about where we want to end up in twenty years given the various options for establishing a national goal. Reducing poverty – even under our limited and flawed definition would not be a bad outcome. But, it would be such a limiting goal, likely to force debates over whether there is a “new paradigm of behavior-driven poverty”, and ill designed to improve economic mobility or inclusion. Meanwhile, the debate and the effort to meet the flawed target could suck up all our energy and resources for years to come.