Around a decade ago, the Indicators Sub-Group of the Social Protection Committee (ISG-SPC) of the European Commission started working on the statistical construct known as ‘At Risk of Poverty or Social Exclusion’ (AROPE). There was great concern among us, members of the ISG-SPC, whether such a composite, albeit additive indicator would be correctly interpreted by the politicians, the media and the public.
Our aim was to have an indicator which is unambiguous, easily understood and which has a clear normative interpretation.
Regrettably, those concerns were justified following the launch of the 2015 EU Survey of Income and Living Conditions (EU SILC). The great work of the National Statistics Office (NSO), who diligently collect SILC data every year, has been somewhat eroded by the alarmist and sensationalistic titles which appeared in the local media.
Research community felt betrayed by this displayed lack of understanding of the AROPE measurement. The nature of the indicator is somewhat complex because it rests on three pillars: a) disposable income - the financial aspect of AROPE; b) material deprivation in its severe form, sometimes a victim of a subjective personal opinion of family hardship; and c) the number of months worked annually, the low work intensity, which penalises countries where high proportion of female population still does not form part of the national labour force, as in our case.
Additionally, the time component of the AROPE measurement is also a two-layered affair, which combines the disposable income of the calendar year prior to the survey, in the case of SILC 2015 the income of year 2014, with the remaining two pillars tied to year 2015. Visibly, this gives plenty of space for an infernal amount of undue simplifications and biased descriptions of what has actually been surveyed.
Who are the households that, in 2014, claimed not being able to afford chicken or meat every other day when their disposable income reaches €68,144 a year?
For us researchers, keeping the ARP rate reasonably stable, while the ARP threshold increases by as much as €400 a year (so far, this happened only in 2013-15 period), is an achievement because this is the result of a hefty increase in the total disposable income of Maltese households.
A wealthier EU member state than Malta had its ARP threshold increased by only €31, however, its increase in ARP rate was fourfold (2013-14 data). Such a comparison, as well as the AROPE decrease by 5,000 persons in 2015, should be something for us Maltese to be proud of.
The activation policy also plays a part. In families where parents worked between 36 and 40 hours a week, only one per cent of the children lived in ARP. Where parents worked 0-8 hours a week, the ARP rate of their children stood at 71 per cent (2014 data).
However, the EU SILC figures also point at causes of due concern and require investigation. We ought to ask ourselves who are the 3,000+ persons who are still registering as unemployed, despite our booming labour market. Who are the households who in 2014 claimed not being able to afford chicken or meat every other day, when their disposable income reaches €68,144 a year?
Is this truly enforced deprivation? How shall we factor in the hardship of those forced to pay market rents, or those on age pension following real-life situations such as divorce, separation or chronic illness?
That the achievements presented by the NSO have gone so wrong in some parts of the media, might not be a result of deep thinking, so there is always a hope. However, their snowballing of ARP figure into an alleged poverty epidemic does a disservice to the real poor, as they get completely overlooked in these exaggerations.
Finally, a word on the issue of affordability ranging from seven-day holiday to ownership of a passenger car. Car, as a positional good in this ‘visible society’ of ours, has a very particular meaning, other than its mere utilitarian function.
Perhaps, the key to understanding the real poverty is in the car, since only 12,896 people out of 420,008 claimed not being able to afford one in 2015.
Could they be Malta’s real poor? Maybe they can drive us through these treacherous data crossroads.
Miljanic Brinkworth lectures at the University of Malta.