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Combating poverty and exclusion depends on active policies that emphasise employment. That also means public effort.
"The greatest of evils and the worst of crimes is poverty". George Bernard Shaw wrote these words in 1907. Today, a century later, his observation is truer than ever, for it is against the backdrop of todays wealthy OECD countries that the costs of poverty seem both so large and reprehensible.
Yet, which OECD government does not attach importance to combating poverty and exclusion? After all, poverty is not just a waste of human resources and potential, but threatens to erode the capacity of governments to sustain economic growth, as well as social and political cohesion. The real question is how to implement more effective policies in reducing poverty, and give them the priority they need within OECD governments' overall policy objectives.
Traditionally, governments have tried to silence the consequences of poverty by treating the symptoms with income support. This has helped alleviate some of the worst symptoms of poverty, but at the cost of dimming personal ambition and work effort, and of keeping poverty alive. A more active approach to social policy can help to achieve lasting reductions in poverty and exclusion by helping recipients back on their feet, to support themselves and their families. Active social policies are designed to help people overcome obstacles to getting a job. They focus on better integrating the services available to help benefit recipients, and redefine the social relationship between clients and providers of social support, through a mutual obligation to co-operate in the rehabilitation process.
How is poverty measured? For a start, it is not just a question of income. People may have assets, or simply be in a temporary financial crisis. But income is still part of getting out of poverty, and disposable income is the key measure to use.
There are two basic notions of poverty. First, there are people whose income is simply not enough to be able to afford basic goods or services. This is absolute poverty, and most measures show it to be in sharp decline in OECD countries, indeed, by more than 60% between the mid-1980s and 2000 when measured with respect to a constant relative income threshold.
But relative poverty is another...