Friday 10 February 2012

Minimum Essential Budgets

Nat O'Connor: The TCD Policy Institute recently published a volume by the Vincentian Partnership for Social Justice and Dr Micheál Collins, which examines the 'minimum essential' budgets required by different household types. The Vincentians have been working on this kind of study for a number of years, and a copy of the report can be found under publications on budgeting.ie.

I think Dan O'Brien rather unfairly criticises the report in his Irish Times editorial. He argues that taxpayers’ money should not have funded the research, and that "Impartiality and objectivity are hallmarks of academic research. Publishing the views of a lobbyist blurs the line, thereby undermining TCD's credibility."

In fairness, one of the authors, Micheál Collins, was working as an academic member of staff at TCD at the time of receiving the grant. If anything, his work on the report has helped document the method and findings in a more academically rigorous way. Money was not being given to lobbyists, as Dan O'Brien portrays it.

Every piece of research comes from implicit or explicit normative assumptions. What matters is whether or not the method is robust and the evidence is clearly visible so that others can make alternative interpretations of the same data. In fairness to this study, it is based on an established, qualitative method involving focus groups who discuss what they regard as a reasonable standard of living and it does provide quite a lot of detail about the weekly costs they regard as 'minimum' broken down under a range of headings.

This standard of living does involve more than survival and includes a modest degree of "social inclusion and participation". However, Appendix A shows what is involved in minimum social participation remains frugal. For example, the €12.66 per week in a family budget for socialising is based on ten social events per adult each year. The researchers then go to the local shops and services and check out the prices to pay for the list.

What the report highlights is that, unsurprisingly, a great number of people on modest incomes in Ireland do not have an income sufficient to meet a 'minimum essential' budget. In particular, families with children in a number of cases have insufficient incomes. Moreover, it is of concern that a single person working full-time on the minimum wage also cannot afford an essential budget.

However, some households do have sufficient income. For example, a pensioner couple's income from the non-contributory state pension is sufficient to cover their minimum essentials because of the range of other non-cash supports, like fuel allowance, free travel and medical card. That's a useful validation of the welfare system and hardly a 'lobbyist' perspective.

What is missing from the report is a more full exposition of the costs. The publication notes that grocery prices are typically based on the least expensive supermarket 'own brand' items, but we only see aggregates and it would be useful to see item-by-item breakdowns; I imagine that this would be of particular use to the Department of Social Protection and services like MABS who advise people on how to budget their income. It should also be of interest to businesses to see evidence of market niches for cheaper goods and services.

The focus on weekly itemised expenditure is also of value because it highlights in very tangible terms how vulnerable household budgets are to relatively small ‘shocks’, like medical expenses or the costs of a funeral. What happens in reality is that people on low incomes are particularly badly insulated against such one-off expenses and these can lead to the use of moneylenders. In 2007 (latest survey) more than one in five people had difficulty accessing banking facilities (i.e. getting a basic bank account). This gap is filled for people on the lowest incomes by “52 licensed moneylenders in Ireland, 36 of whom operate ‘doorstep collection’ businesses” and who can charge over 150 per cent interest on small loans. See TASC (2010) Life and Debt.

The issue of one-off 'shocks' emphasises the importance of non-cash supports as 'shock-absorbers'; such as the medical card or social housing. These help people to cope with sudden expenses, without having to use up any savings they might have or take a loan. The study also usefully opens the door to more in-depth examination of where non-cash supports can help people get by without getting into debt.

8 comments:

Paul Hunt said...

I read thorugh this report before the post appeared here. It appears to be based on the perfectly valid and widely accepted internationally (if more in the breach than in the practice) position - which I decribed in a comment on the previous post - "that the rights and entitlements of individuals should be independent of the circumstances of their birth or the social or economic context and taxes should be raised to provide the services to meet these rights and entitlements. This is a perfectly valid position, but it requires an enormously strong and inclusive national common bond to secure and sustain the popular support and democratic legitimacy for such a level of taxation and of economic and social provision."

This is the classic description of how moral judgements and sentiments are defined externally from human nature and in terms of how human nature in some sense 'should be'. And it is the fundamental fault-line between those, who might in some broad sense be considered as being, on the left and the right. The latter in contrast seek to ground these moral judgements and sentiments in how human nature actually is and in how it might as concerted, collective, democratic effort is applied to extend the domain and intensity of moral sentiments. And never the twain shall meet.

Noy surprisingly, there has been no response to my previous comment. Nor do I expect one here, because this strikes at the very core of the entire 'progrssive-left' project.

Martin O'Dea said...

At one level I agree - and, of course suggesting ideal circumstances without factoring in current circumstances and possible rates of manageable change would not be sensible.

Much of the arguments, though, come back to the fact that it is, necessarily hard to change, and requires sheer hard work and an acceptance that resigning oneself to how 'things are' is sensible but cemeteries are full of such people who generally contribute little to the betterment of humanity.

I think that there are 3 groups here and not just the left and right (if I might - this is not a scientific but illustrative point) the 3 groups being the naive or 'early' left -- the right (including those who remain entrenched through maturing in 'learned' behaviours, and those who have emerged from a youthful spell in the naive ideology of the left - see through lots of the nonsense and understand how the world works and grow impatient with some of the youthful ill-thought through ideas they hear from 'the left')

The last group though are those who take the time to mature - find as much as they can out about the workings of things, drift from the naive to the understanding and at some point still or re-appreciate that this inert state is really of little benefit to any other than themselves.

From these position holders much sounds like the naive left but it is essentially different. From here the fear of being wrong does not drive thinking, nor indeed, the desire to be right but merely the observations of problems and injustices and a concentration on solutions; as well as a realisation that as individuals and parts of groups there really is no human logic in the group allowing for any individuals to be privileged ahead of others (or that, in fact, as 21st century neuroscience is showing empathy and not some misunderstood 'competitiveness' underlies our evolutionary and species success - from there you can see that, in fact, the world has been and is moving left in a slow bumpy run from feudalism through democracy and so on - that is accommodated by greater production, technology, levels of supply of materials and information etc; and that in the bigger picture the friction to this historical reality that comes from the conservatives reaction throughout is much less useful (though it does act as a necessary brake sometimes) than those that expound it believe.

It goes without saying that there are those on the right who feel that what they argue is correct, but that, of course, there are many who make their arguments right in their own mind not because they fundamentally believe them, or even because while they agree with the principles of the left they do not feel people can or will reach their standards; but because the status quo benefits them
In my humble opinion Paul, you hold an aggressive and useful mirror up to the naive left here (and I think for the second reason really i.e. you don;t trust the ability of the left to achieve what is aspires to), but your starting points for many arguments do not have the impact you might think for many others; and I am saying that as someone who really admires and enjoys most of your contributions.
Essentially Paul, a bunch of kids on a creche floor - they don't know why or deserve to be in a situation where some of them are ok and some of them have very little chance or massive obstacles to face from the off - the intellectual jousts remain but there should really be concerted and coordinated efforts to redress that inherited imbalance . The incredible thing really is (as with the flat world model) that so many continue to allow their fear of change (understandable and evolutionarily necessary to a point) to make them ever more malleable to those who create a more and more malformed and manipulated to their privileged view, world

Nat O`Connor said...

@Paul Hunt

First of all, I agree with the proposition that “the rights and entitlements of individuals should be independent of the circumstances of their birth or the social or economic context and taxes should be raised to provide the services to meet these rights and entitlements.”

I also agree that the willingness to pay tax to provide for rights and entitlement requires a “strong and inclusive” common bond. However, it is debatable whether that must exclusively or at all based on a “national common bond”.

An alternative is acceptance of universal human rights and human dignity. It is also plausible that European standards may develop over time into a shared common bond. Certainly, Europe has been a driver for formal recognition of human rights and ECJ rulings have helped bring national governments to account. Arguably, ‘American values’ are qualitatively different from the national common bond of a small, ethnically homogenous country. And the Nordic states have a shared sense of Nordic values that transcends linguistic or ethnic boundaries, including the Finns (Finno-Ugric people) alongside the Scandinavians.

One could go at this from the local end too. People in local communities and villages may have a tighter common bond than they have for the country overall. As a slight aside, strong local government is an important factor in the Nordic systems, as people are very conscious that things like local schools and clinics are run by their neighbours, not by an anonymous monolithic ‘system’.

All good so far. But more directly, it is not at all clear to me how this “strikes at the very core of the entire ‘progressive-left’ project”.

You seem to claim that belief in rights and entitlements is “the fundamental fault-line between those, who might in some broad sense be considered as being, on the left and the right”. Yet, there is support for rights (and responsibilities) across the political spectrum. And on all sides there is a mixture of defining human nature from a scientific perspective (as it actually is) and from a normative perspective (as it could/should/might be).

Paul Hunt said...

You skirt this fundamental fault-line and then try to claim it doesn't exist. It is the difference between those who seek, continuously, to expand the domain and intensity of moral sentiment and to exapnd and strengthen the common bonds (yes, both national and local) to the limits of what the need to secure democratic legitimacy will allow and those who define rights and entitlements externally from this, who assert that selfishness, greed, ignorance, false consciousness, the forces of capitalism or markets, you name it, prevent the enforcement of these rights and entitlements and that all of these should be beaten back, defeated, supplanted, taxed to within an inch of their existence, whatever, to ensure the enforcement of these rights and entitlements.

Those who advance the latter approach may be able to seize the moral high ground of universal rights and entitlements, but it has neither pratical not moral merit. It is illiberal in that it suppresses the very freedoms that generate economic prosperity and the expansion of the domain of moral sentiments and the strengthening of common bonds. And it is anti-democratic in that, should it secure a popular plurality, it excludes and crowds out those who disagree and are opposed to this approach. The quality of democracy may be assessed by the way those who are either permanently or from time to in a monority are treated.

Nat O`Connor said...

@ Martin O’Dea

I agree with your post; in particular, I agree that focusing in on equality for our children “on the crèche floor” is crucial to social change and the achievement of a better society.

Nat O`Connor said...

@ Paul Hunt,

I don’t see a “fundamental fault-line”.

You describe two extreme perspectives as a dichotomy whereas I see a spectrum. I think there is more evidence to see it as a spectrum.

In the dichotomy, those on one end seek to expand moral sentiment to strength the common bonds to secure democratic consent for sufficient resources to pay for a series of policies designed to advance the achievement of human rights. On the other end, those who share the same (or similar?) set of human rights goals decide not to engage in public information (i.e. influencing moral sentiment) and instead they seek to use (unspecified) other means to tax people more than they want to be taxed.

From my point of view this is a spectrum. Someone might well have a coherent philosophical position that includes both extremes you describe and plenty in-between. Taxing people a little more than they might want is very different from taxing people “within an inch of their existence”. It is not an ‘either-or’ question. And it may differ from topic to topic.

For example, one might see the human rights of certain minorities not being respected and no majority (either locally or nationally) in favour in doing much about it. This is the classic ‘tyranny of the majority’ problem in democratic thinking. We have had mistreatment of lone parents, Travellers and plenty of others. If one believes that human rights stem from inalienable human dignity, than those minorities should have their rights fulfilled – even if in unenlightened times there is a majority who don’t agree. (And the UN, Council of Europe and ECJ all have a roll in holding states to account).

However, the same person might also feel that the universal right to education or housing is unattainable at this time, and they may have very different views on how far we can go to make people pay more tax to pay for other people’s rights.

This does not invalidate democracy. On the contrary, if people do not have a set of civil, political, social and economic rights fulfilled (to at least some extent) than it is not possible to have genuinely inclusive democracy. We risk marginalised groups not voting, which weakens their influence in turn. It may be said that there is an element of ‘paternalism’ in what I am suggesting. But clearly defined and documented minimum human rights being fulfilled does not constitute anything like the paternalism of the Irish state in the past. And how else can you ensure sufficient rights are in place so that democratic institutions, such as press and elections are genuinely ‘free and fair’?

Universal rights and entitlements do not suppress “the very freedoms that generate economic prosperity and the expansion of the domain of moral sentiments and the strengthening of common bonds”. Civil and political rights, including freedom of association, privacy and private property, are all protected as part of human rights.

At this point, I think the argument ends up in detail about the extent to which each right is or is not adequately protected by the current set of laws and institutions; this get into the balance between civil versus economic rights, and so on.

Nat O`Connor said...

(continued)

You argue that “it is anti-democratic in that, should it secure a popular plurality, it excludes and crowds out those who disagree and are opposed to this approach. The quality of democracy may be assessed by the way those who are either permanently or from time to in a minority are treated.”

This doesn't make sense to me. If Party A gets a majority, of course they are not entitled to run roughshod over human rights! Who is saying they should?

Of course minority rights should be fulfilled in democracy! What matters in the final analysis is how strong are the institutions that respect, protect and fulfil human rights. It is another classic question for democracy: ‘who guards the guardians?’.

One way of guarding the guardians it to have much more open government and freedom of information protected through an independent judiciary. An independent judiciary likewise defends a lot of traditional rights, including property. Quasi-judicial institutions like the ombudsman or equality authority can help people to access their basic rights. These are the kind of institutions that have seen their funding cut in recent years and TASC, among others, has been drawing attention to that.

Paul Hunt said...

@nat O'Connor,

Many thanks for putting in the time and effort with such a comprehensive response. I agree there is a spectrum political and economic tyerms from the hard left at one end to the xenophobix, ultra-nationalist right at the other. But there is this area along the spectrum where centre-right and centre-left overlap, where most median voters reside and though which a fault-line runs. This fault-line moves up and down this area of the spectrum - ussually in relation to voters' perception of the economic situation and median voters may find themselves on different sides or switch sides at election times. It also shifts when enough voters get fed up of a government that has been re-elected previously (and sometimes more than once).

The key point I am making is that, generally throughout the EU for the last number of years, the fault-line has been shifting inexorably leftwards - and this has not been arrested by the economic and financial crisis when one would expect it to shift decidedly rightwards. (I accept that a majority of French voters may elect Francois Hollande, but they haven't had a socialist president since 1995, Sarkozy is particularly annoying and many were forced to vote for Chirac in 2002 when Jospin was eliminated in the first round. The sense of time for a change may be as potent as, if not more potent than, any shift in allegiance to socialist policies.)

The capitalists may have triumphed over the unorganised labour they hire, but organised labour has colluded with the state as an employer and with the capitalists who hire organised labour and all have conspired against the interests of citizens as taxpayers who pay collectively and as consumers who pay individually for good and services.

Until the left recognises and seeks to manage the inevitable conflict between the interests of workers as producers of goods and delivers of services and the interests of the vast majority of citizens as taxpayers and consumers and seeks to build on this to confront capitalists and their attempts to suborn the state the fault-line will continue to move leftwards until the left resembles an extinct volcano.