The Cost of Living and Poverty

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I’ve written a couple of articles about the Cost of Living Crisis and why we should care about it recently.  The other day, I saw this comment on twitter retweeting a list of actions that are required if we are to tackle poverty.

Well, there is one small problem with the suggestion and that is charity law. It is possible to campaign for all kinds of things and charities can take a position on particular policies. However, once they get involved in political campaigning, for or against a specific party, then they are no longer acting as a charity.

Having said that, both Luke’s tweet and the comment by Jack Monroe quoted are worthy of consideration as we start to think more about how we should respond to the challenges face.  First of all, I agree with Luke that the measures he describes including a £200 loan to pay for rising energy costs, foodbanks, soup kitchens and giving out warm clothing won’t tackle the problems of poverty, hunger and homelessness.

Secondly, it’s also important to make a distinction at this point between a cost of living crisis and poverty. We are aware that there are people who live in poverty and that this is a constant experience.  In this category we tend to include people whose income is so low or none existent that they are often in want when it comes to basic things including food, clothing, housing. What they do have tends to be seriously inadequate.  Even still, it is difficult to provide an objective criteria for poverty.  Even the less well off in Britain tend to be in a better place than the poorest in other countries due to things such as benefits and the minimum wage. However, there are still significant numbers of people who do struggle for various reasons. For example, Asylum Seekers are prevented from working and giving minimal sustenance allowances. Then there are people who find themselves homeless and unable to access even the benefits they are entitled to. There are people who are dependant upon pay day loans, pawn shops and sadly loan sharks so that they are drowning in debt.  In some cases you might argue that they are where they are due to their own poor decisions in others they have ended up where they are because of tragic circumstances or what others have done to them. However, we would objectively describe them as living in poverty.

Now talking about poverty and its impact on those people is a little different to talking about a specific cost of living crisis.  A crisis where inflation outpaces wages is one that drags more and more people into it. Few people are left unaffected.  Many of us are having to make difficult choices at the moment, including plenty of people who wouldn’t consider themselves poor and who are in jobs paying above average wages.  This is different from poverty because whilst people may have to choose to forgo some things, most won’t end up in complete hardship. Also, the expectation is that for most, the crisis will be temporary. For example, the Bank of England remain of the view that whilst Inflation will peak at around 7% this year it will start to fall back in 2023.[1]

However, distinguishing the two does not separate them out.  Poverty for some is linked to any wider cost of living crisis that we might face. There are two reasons for this. First of all, because an economic crisis will affect the most vulnerable the hardest. Those who have been living on the edge will suffer the most.

Secondly, an economic crisis will draw more people into poverty.  Whilst many will experience short term pain and have to tighten their belts/cut their cloth accordingly for a period of time, others will be hit hard and may not fully recover. It will push some families into debt not to pay for new houses or new cars but to pay for clothes, food and fuel.  It will result in some people being unable to keep up mortgage repayments as interest rates increase and that will lead to homelessness. In the worst case scenario, anti-inflationary measures may lead to recession and many people losing their jobs.  Some will find new work as the economy recovers but there will be plenty who find it hard to get back into the job market.

All of these are good reasons for why we need to pay serious attention to what is happening economically.

In my next post on this I plan to talk about why it’s okay to disagree with different political measures including those on Jack’s list. I also plan to look at what the Bible has to say about wealth, poverty and looking out for each other in a further article.

[1] Though that of course depends on a set of assumptions that may change. For example, conflict or ongoing tension between Russia and Ukraine, especially if others are drawn in directly or indirectly will create further economic uncertainty.

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