Towards new indicators of disadvantage: deprivation and social exclusion in Australia

Australian Journal of Social Issues, Winter, 2008 by Peter Saunders, Yuvisthi Naidoo, Megan Griffiths

1. Introduction *

Studies of Australian poverty have concentrated on comparing people's incomes (adjusted to allow for differences in family needs) with poverty lines in order to discover how many people are poor (the poverty rate), who is affected by it (the structure of poverty) and how it has changed over time (the poverty trend) (Saunders and Bradbury, 2006; Wilkins, 2007). These studies have focused community attention on the need to assess the adequacy of income support payments, tackle the root causes of poverty (e.g. unemployment and discrimination), and address its consequences (e.g. social alienation, restricted child development and poor health outcomes).

However, conventional poverty studies have been criticised for adopting a narrow basis on which to determine whether or not someone's standard of living corresponds to poverty without providing additional evidence showing that those with low incomes are in hardship and missing out (Whiteford, 1997). The poverty line used to identify who is poor has also been criticised for being arbitrary, while the income statistics used to measure poverty fail to capture the role of resources other than income (e.g. wealth) that can be used to meet needs.

A recent report published by the Organisation for Economic Cooperation and Development (OECD) has drawn attention to the limitations of the conventional income approach to poverty measurement, noting that:

'Income measures do not provide a full picture of "command over resources": they neglect individuals' ability to borrow, to draw from accumulated savings, and to benefit from help provided by family or friends, as well as consumption of public services such as education, health and housing' (Boarini and d'Ercole, 2006, p. 10).

The implication is that the role of these neglected factors will only emerge if the focus is shifted onto a broader framework that incorporates direct living standards indicators.

Problems have also been identified with the reliability of income as measured in social surveys in capturing the living standards of those at the bottom of the distribution. The Australian Bureau of Statistics (ABS) has argued that 'household income is not a good indicator of the total economic resources available to many people with very low recorded incomes' (ABS, 2006, p. 69). It now defines 'low income households' in its official income distribution reports in a way that excludes those in the lowest decile (bottom 10 per cent) of the income distribution because of these concerns (e.g. ABS, 2004).

Together, these developments suggest that an alternative approach is needed that involves identifying more directly the different forms of deprivation that people actually confront in their daily lives (Ringen, 1988). This response is consistent with the view that although income may provide a valuable metric for measuring poverty, the concept of poverty needs to be grounded in the conditions faced by those who experience it. It is this failure to provide such a foundation in poverty line studies that has exposed them to criticism for being out of touch with the lived realities of poverty (Lister, 2004; Saunders, 2005).

This paper takes a step in this direction by examining the issue of poverty using a living standards approach derived from the literature on deprivation and social exclusion. It discusses how these alternative frameworks overcome the criticisms set out above and presents findings from a new study into poverty and disadvantage in Australia.

The paper is organised as follows: Section 2 provides a brief overview of the literature on deprivation and social exclusion, focusing on their relationship with poverty defined as a lack of income. Section 3 describes the research strategy and summarises the data used in the analysis. Sections 4 and 5 present the main results on deprivation and social exclusion, respectively, while Section 6 considers the overlap between (income) poverty, deprivation and exclusion. The main conclusions are briefly summarised in Section 7.

2. Poverty, Deprivation and Social Exclusion

Although both deprivation and social exclusion have emerged as major themes in the poverty literature, their role and contribution have differed. The concept of deprivation has mainly been used to identify who is in poverty following its initial development by British sociologist Peter Townsend (1979), who argued that:

'Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or at least widely encouraged or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns and activities.' (Townsend, 1979, p. 31)

In order to make the approach operational, it is necessary to identify' which goods and activities are 'widely encouraged or approved' in society, and establish that those who do not have these items are constrained by a lack of resources from obtaining them. Deprivation can then be defined as an enforced lack of socially perceived necessities (or essentials) (Mack and Lansley, 1985, p. 39).