The poverty debate: defining what makes one poor

When it comes to the issue of poverty, the two main parties have come up with two diametrically opposite views. As can be expected, the government, quoting NSO statistics, claims that poverty has decreased by 4.5% while the Opposition maintains that 100,000 people are at risk of poverty.

Asked to fact-check these views, the Times of Malta’s verdict was that, while overall material deprivation has indeed gone down, this conclusion came with a significant caveat: “The difference between high and low earners appears to be increasing and there are now more people falling below the poverty line and earning significantly less than the median income than there were in 2013.”                                            

While this appears to be a contradiction, it can be explained by the significant factor that those who are most at risk are elderly people whose only income is their pension, and single-parent households.

Both cohorts have increased in the last 10 years. We have an aging population that has to survive on a pension which on average ranges from €700 - €1,000. If they have never been in a position to save for their twilight years, they will find themselves struggling to make ends meet while coping with the unexpected medical expenses which inevitably come with old age.                                    

Meanwhile, the number of couples who separate or parents who are raising children on their own without a partner has also gone up. If parents with a double income think life is tough, imagine how much harder it is to afford the cost of raising children on a single salary?

One also has to bear in mind that single parents are also more likely to end up renting a property in a rental market which has become shockingly out of control.      

To understand how “at risk of poverty” is measured, one needs to look at the Material and Social Deprivation indicators, which are based on 13 items, seven of which are related to the household and six of which are related to the individual.

If a person experiences seven out of 13 of these items, one is considered to be at risk of poverty.              

List of items at a household level:

• Capacity to face unexpected expenses                                  
• Capacity to afford to pay for a one-week annual holiday away from home
• Capacity to be confronted with payment arrears (on mortgage or rental payments, utility bills, hire purchase installments, or other loan payments)                                                  
• Capacity to afford a meal with meat, chicken, fish, or vegetarian equivalent every second day
• Ability to keep home adequately                                                             
• Have access to a car/van for personal use                                            
• Replacing worn-out furniture                                                    

List of items at an individual level:

• Having an internet connection                                                  
• Replacing worn-out clothes with some new ones
• Having two pairs of properly fitting shoes (including a pair of all-weather shoes)
• Spending a small amount of money each week on him/herself
• Having regular leisure activities                                                 
• Getting together with friends/family for a drink/meal at least once a month

Bearing all this in mind, the dichotomy which exists in Malta can be better appreciated. On the one hand, we see daily complaints about the spike in the cost of living for basic essentials (which is true), and yet on any given day, restaurants, cafes, and other places of leisure are packed.

Just to give another example, I read that the Luna Park at Ta’ Qali was charging a very pricey €5 per ride, and yet… you still heard parents say, “but my child wants to go, what shall I do, tell them they can’t go when all their friends are going and deprive them of some fun?”                  

This directly relates to the above-quoted statement that the disparity between high and low-income earners is increasing.

You have people who are comfortable, with enough disposable income to eat out and socialise regularly, while others count their pennies to make sure they have enough to buy groceries until the end of the month, as they wait anxiously for their next paycheque.

Then there is another segment of the population which I can only describe as living in denial - they cannot really afford to go out that often or spend money on unnecessary purchases, but they do it anyway, even if they are getting into credit card debt to do so.

Much like the parents who insist their children should not miss out, many adults have a similar mindset: “why should I deprive myself after working so hard all week?”

This type of thinking became particularly prevalent after the health scare brought about by COVID, the many people who died or became seriously ill, and the lockdown restrictions, when we didn’t know whether we could ever go to concerts, attend weddings and parties or travel again.

Many came out of those two years determined to enjoy life every chance they get and to not put anything off ever again. Can’t really afford it? Who cares? Carpe Diem and as for tomorrow…that will take care of itself.

The widening gap between the haves and have-nots can also be directly traced to the property market. Those who are topping up their salaries with another income through renting out a second property (especially one which was inherited and/ or bought years ago when prices were much lower) are definitely on another level when compared to those getting by on an average wage.

From the vantage point of someone with, say, a civil servant or teacher’s salary, the capacity to spend on frivolous items without having to worry about how they are going to pay their mortgage and bills is something they can only dream about.

And if a teacher (just to keep to this example) has to be careful with their spending, then what can we say about those on the lower rungs of the salary ladder?

Because there is an elephant in the room when it comes to these surveys: they are not capturing the reality of imported poverty. The data for the NSO survey was gathered from 4891 households, and since these households are usually selected from the Elec-toral Register using systemic random sampling, it is unlikely that economic migrants are included in this sample.

One thing we know for sure is that in ten years the population has grown through the influx of foreign workers, and not all of them are in the highly-paid gaming industry and living the good life.

On the contrary, many are low-income earners such as carers, taxi and bus drivers, cashiers, waiters, construction workers, food couriers, and cleaners. They cannot afford to rent on their own, so they share apartments, and we have all seen the photos of the miserable conditions they end up in as greedy landlords transform as many rooms as possible into “bed-rooms” by fitting in bunk beds.

If the NSO had to carry out a survey among this segment of our population, the numbers would look quite different, and the boxes on the 13 material and social deprivation indicators listed above would be ticked quite rapidly.

In fact, if we had to be honest with ourselves, neither the government nor the Opposition really need any statistics to tell them about the reality we see all around us.

We have become a society where the rich have become richer, while a new demographic of poor people has been brought here on the pretext of a better life, but where they are merely existing, finding themselves in a foreign land where they are resented, unwanted and in some cases, hated.

Caught in the middle is your average Joe, with upwardly mobile social aspirations which, while praiseworthy, are often unrealistic and unattainable. Young couples scrimp and save for their big wedding and then buy an apartment and often delay having children because it would mean getting by on one income or putting their baby into childcare.

It is no wonder that after all this, as they are trying to keep their head above water, the stress and anxiety of raising a family, the fatigue of juggling work and domestic duties and the burden of financial obligations, often leads to marital breakdowns.

In short, when we talk about poverty (or wealth), let us look at it holistically about what it means in real terms for all those who live on this island, and what we have had to sacrifice in return.