A pound of state benefits has less impact than a pound from independent earnings
The Joseph Rowntree Foundation (JRF) published a paper on Wednesday comparing a range of policies to help low paid workers. Perhaps unsurprisingly, they conclude that increasing benefits is the best option. Like so much analysis on poverty, the report suffers from policy myopia in two respects. First, it looks only at cash benefits and direct taxes, ignoring the policy choices which set the constraints of the problem. Secondly, wider implications of the options are ignored. Cost of living The report uses a basket of goods which determines a ‘minimum income standard’. But no attention is paid to policies which increase the cost of goods in that basket, save for childcare.