1 / 23

Radical Statistics Annual Conference, Hathersage, March 3 2006 Must Poverty be Politicised?

Radical Statistics Annual Conference, Hathersage, March 3 2006 Must Poverty be Politicised?. Jay Ginn Centre for Research on Ageing and Gender Sociology Department University of Surrey, Guildford, GU2 7XH, UK j.ginn@surrey.ac.uk. Spinning pension poverty.

nerita
Download Presentation

Radical Statistics Annual Conference, Hathersage, March 3 2006 Must Poverty be Politicised?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Radical Statistics Annual Conference, Hathersage, March 3 2006Must Poverty be Politicised? Jay Ginn Centre for Research on Ageing and Gender Sociology Department University of Surrey, Guildford, GU2 7XH, UK j.ginn@surrey.ac.uk

  2. Spinning pension poverty • Are ‘objective’ poverty statistics possible? • What do we mean by ‘objective’? • Are the right questions being asked? • Are the assumptions reasonable? • Is the meaning of the statistics transparent? • Is the EU a guarantor of comparable poverty statistics?

  3. Spinning poverty figuresExample: Pensioners and pension systems • Info needed in pensioners campaigns • What % of 65+ are in poverty? • Is state pension spending sufficient? • Are better state pensions affordable and sustainable? 2.Pension system and EU social objectives • Adequate for full participation? • Allows living standard to be maintained? • Promotes solidarity between generations?

  4. EU Open Method of Coordination EU member states agreed in 2001 on 11 objectives for pension systems, under the headings of adequacy, sustainability and modernisation to meet changing societal needs. Indicators developed to compare and measure progress. Adequacy. Member states agreed to: • Ensure that older people are not placed at risk of poverty and can enjoy a decent standard of living; that they share in the economic well-being of their country and can accordingly participate actively in public, social and cultural life; and • Indicator = Poverty rate • Provide access for all individuals to appropriate pension arrangements, public and/or private, which allow them to earn pension entitlements enabling them to maintain, to a reasonable degree, their living standard after retirement - Indicator = Replacement rate

  5. Pensioner Poverty: Definition Main EU poverty threshold for individuals = <60% of national median income • Based on household income shared equally among members • Household income equivalised to adjust for household size

  6. Some curious anomalies Figures produced by Eurostat (2002) showed Britain with the highest pensioner poverty rate in EU - 39% Figures were re-worked during 2002 at the insistence of the British government Revised figures gave a reduced poverty rate Rate also changed in some other countries: • reduced in Ireland • increased in Austria, Denmark and Finland

  7. Source: Eurostat 2001, The Life of Women and Men in Europe. A statistical portrait. Based on ECHP 1998

  8. Revised figures Source: CEC 2003, Table 2, Joint Report by the Commission and the Council on Adequate and Sustainable Pensions

  9. Source: CEC 2003, Joint Inclusion Report. Statistical Annex

  10. Labour achieves huge reduction in poverty rate in 1 year! Poverty rate for British population aged 65: M W All • 32 45 ~ 39% (Eurostat) 1998 - - 21% (CEC 2003, revised figure) 2002 19 28 ~ 24% (CEC 2003)

  11. Unequal risk of poverty among pensioners % 65+ receiving income support, 2001 Men Women Married/co 4 1 Single 13 20 Widowed 11 20 Divorced 23 40 Arber and Ginn 2004, in Social Trends

  12. Assessing EU pension systems National Pensions Strategy Reports, 2002 and 2005 Main indicators required by EU: • Risk of poverty age 65+ (defined above) • Relative income age 65 (median equivalised income age 65+ / <65) 3.Replacement Rate (RR) (median income of retirees aged 65-74 / median earnings of those employed aged 50-59) • Income inequality (top 20th percentile / bottom 20th percentile) • Theoretical replacement rates (simulated pension income at retirement / earnings in last year before retirement)

  13. Actual Replacement Rate Defined as: Median income of retirees aged 65-74 / median earnings of employed aged 50-59 ?????????????????????????

  14. Simulated replacement rate Assumptions to be used: a) Base case • 40 yrs full time employment • Average earnings over working life • Retirement at 65, in 2005 • Most common pension schemes • Single status b) Variants must include broken career (30 years)

  15. How did UK respond in 2005? • Poverty rate 65+ 26% • Relative income 65+/0-64 0.74 3. Real RRNot stated 4. Income inequality ratio4.03 5. Simulated RRa) gross 66% net 82% b) gross 50% net 64%

  16. Simulated RR: Optimistic assumptions by UK a) Base case (40 yrs FT, av earnings) • 30 years in DB occupational pension scheme, giving 50% replacement Market risk, job change and access, 39% of men in OP b) Broken career (30 yrs) • Average earnings or what? Not stated • FT/PT? Not stated • 33% replacement from private pension, implies 20 years in DB scheme On average, a mother has 8yrs gap, 14yrs PT, 18yrs FT. 42% women in OP We cannot check against actual RR Winter Fuel Allowance included

  17. Other spins on pensions • Affordability • Govt figures for ‘Pension spending’ usually include cost of means tested benefits • They also ignore tax spending, cost of rebates and surplus in NI Fund.

  18. Public subsidy to private pensions Tax spending (net) 1979 1991 2000 £1.2bn £8.2bn £13.7bn (~2% GDP) Beneficiaries of tax spending Half -> top 10% of taxpayers A quarter -> top 2.5% of taxpayers So subsidy is mainly to well-paid men – and fees and profits for pensions industry Rebates cost about £8bn pa. NIF has surplus of nearly £35bn in 2006

  19. Other spins 2. Sustainability • ‘Apocalyptic demography’ ignores difference between age-based and employment-based support ratios • Also ignores rising trend in productivity, historically >1.8% pa The average worker will be 2x as productive in 2045, assuming 1.75% pa rise in productivity

  20. Spinning pension poverty • Are ‘objective’ poverty statistics possible? Depends • Are the right questions being asked? No • Are the RR assumptions reasonable? No • Is the meaning of the statistics transparent? No • Can EU promote comparable poverty statistics? Partly

  21. Conclusions Governments have an interest in: • Reducing pensioner poverty figures • Legitimating actual cuts in state pensions, while • Implying pension spending is being maintained • Obscuring (regressive) tax and rebate spending • Using NI Fund for general spending, to keep appearance of low taxes Pension statistics are spun to achieve these aims, hampering campaigns for better state pensions

More Related