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«IZA DP No. 3046 Poverty in Britain in 1904: An Early Social Survey Rediscovered Ian Gazeley Andrew Newell September 2007 Forschungsinstitut zur ...»

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DISCUSSION PAPER SERIES

IZA DP No. 3046

Poverty in Britain in 1904:

An Early Social Survey Rediscovered

Ian Gazeley

Andrew Newell

September 2007

Forschungsinstitut

zur Zukunft der Arbeit

Institute for the Study

of Labor

Poverty in Britain in 1904:

An Early Social Survey Rediscovered

Ian Gazeley

University of Sussex

Andrew Newell

University of Sussex

and IZA

Discussion Paper No. 3046 September 2007 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: iza@iza.org Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions.

The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public.

IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion.

Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

IZA Discussion Paper No. 3046 September 2007

ABSTRACT

Poverty in Britain in 1904:

An Early Social Survey Rediscovered* Until now there have been no national estimates of the extent of poverty in Britain at the turn of the 20th century. This paper introduces a newly-discovered household budget data set for the early 1900s. These data are more representative of urban working households in Britain in the period than any other existing record, although they are not without deficiencies. We use these data to estimate urban poverty in the British Isles in 1904. Applying Bowley’s poverty line we find that about fifteen percent of people in urban working class households had income insufficient to meet minimum needs. This is close to Rowntree’s estimate of primary poverty for York 1899 and in the range that Bowley found in Northern towns in 1912This average masks a heavy concentration of poverty among the unskilled and those with large families.

JEL Classification: N33, O15 Keywords: poverty, Britain, 1904

Corresponding author:

Andrew Newell Department of Economics University of Sussex Falmer, Brighton BN1 9QN United Kingdom E-mail: a.t.newell@sussex.ac.uk * The data which are discussed in this paper were found by the Archivist of the Library of the University of Bangor, Mr. E. W. Thomas, in response to our questions about another of his holdings. We thank him and his team for all their help with this project. We also thank Gemma Mills and Theresa Jennings for invaluable research assistance and the Nuffield Foundation for their Social Science Small Grant SGS/1220, which funded the translation of the data into spreadsheet form.

Introduction What was the extent of poverty in urban Britain at the turn of the twentieth century?

On the face of it, the well-known results of Charles Booth’s London inquiry of 1886-9 and Seebohm Rowntree’s 1899-1900 study of York provided suggestively similar estimates of poverty.2 However, Bowley’s later research in Northern towns showed significant local variation in 1912-13. His poverty rates varied between 4.5 percent of the population of Stanley and 19 percent in Reading.3 Even before the publication of Bowley’s work contemporary analysis of Rowntree and Booth’s results showed that their similarity was superficial. MacGregor pointed out that inference on the national picture from these local inquiries was rendered imprecise because the poverty-lines had not been formulated in the same way.4 Using the published data of the two enquiries, MacGregor estimated how much of Booth’s poverty there was in York and how much of Rowntree’s poverty there was in London. He concluded that there was 3 percent poverty in York using Booth’s standard and 50 percent poverty in London using Rowntree’s standard.5 These early social investigators employed absolute poverty measures based upon minimum needs and it is this concept, rather than relative poverty, based on the shape of the size distribution of income, that we are interested in here.6 As we will discuss in section 1, Booth, Rowntree and Bowley were all aiming to define the poor as those Booth’s found just over 30 percent of the population in poverty in London. Rowntree has a number of measures of poverty. His total poverty estimate, rather than just primary poverty for the population of York was about 27 percent.

Bowley, A.L., and Burnett-Hurst, A.R., Livelihood and Poverty (1915), pp. 38-9 and 42-3 MacGregor, D.H. ‘The Poverty Figures’, The Economic Journal, Vol.20, No 80. (Dec., 1910), p.570 MacGregor, D.H. ‘The Poverty Figures’, The Economic Journal, Vol.20, No 80. (Dec., 1910), p.572 We recognise that all measures of poverty, including minimum needs standards, are socially determined to some extent.





living in extreme hardship. This article estimates absolute poverty incidence among working households in the British Isles using a newly discovered set of data for just over 1,000 working class families in 1904.

The original enquiry, involving nearly 2,000 working class families, was carried out by the Labour Department of the Board of Trade. The summary results and analysis of this enquiry were published in British Parliamentary Papers in 1905 (Cd 2337).

This was the first large-scale official national survey of household expenditures in Britain and was the largest single enquiry of the late Victorian and Edwardian period.

Prior to this, the Board of Trade had collected household budgets from 36 working men in 1887 and 286 households in 1903.7 The only other large scale expenditure survey carried out before World War One is that conducted by the United States Commissioner of Labor in 1890-91 (hereafter USCL). The summary results of the 1904 survey have been widely cited by both contemporaries and historians working on a range of issues varying from nutritional attainment and the physical deterioration debate to the derivation of appropriate expenditure weights for the construction of a cost of living index for working class households.8 Until now it was assumed that the original returns of this enquiry had been destroyed. In fact, a significant sub-sample is extant and we provide an analysis of these data in this article.

In section 2 we present the newly-recovered 1904 data set and compare summary statistics from it with the published summary statistics from the full survey and those Returns of Expenditure by Working Men, BPP 1889 C.5861 and Cd 1761, The consumption and cost of living of the working classes in the United Kingdom and certain foreign countries. BPP 1903.

See, for example, Oddy, D.J. ‘A nutritional analysis of historical evidence: the working class diet, 1880-1914’ in Oddy, D.J. and Miller, D.S The Making of the Modern British Diet, 1976, pp.214-231;

Williamson, J.G. Did British Capitalism Breed Inequality, 1985, Appendix A, pp207-223 and Feinstein, C.H., ‘A new look at the cost of living 1870-1914’, in Foreman-Peck, J.S., (Ed) New Perspectives on the Late Victorian Economy (Cambridge, 1991).

from the 1890-1 USCL survey. The distribution of head of household’s weekly earnings in the recovered Board of Trade sample is very close to the 1906 wage census weekly earnings distribution and average family size is in accord with aggregate demographic data for the period. By contrast, the USCL data is a sample of higher income households and households with significantly fewer children than census data would predict. We conclude that, despite some major short-comings of the 1904 survey, particularly in what it can tell us about differences across regions, it provides a more representative record of the economic circumstances of working class families than does the USCL survey. Section 3 uses these new data to investigate the incidence of poverty, using poverty-lines devised by Booth, Rowntree and Bowley.

Using Bowley’s poverty line, once changes in the cost of living have been taken into account, we find a headcount rate of poverty amongst people from working class households of 15.5%. This estimate of just over one in six is close to Bowley’s primary poverty findings in his important survey of poverty in Northern towns prior to the First World War. Section 4 investigates poverty by skill of the household head and by region. Skill and poverty are strongly inversely related, so that poverty is concentrated among the unskilled. Over 60 percent of families with more than three children and an unskilled head are below the Bowley poverty line.

1: Social investigators and the poverty line.

Booth is generally credited as being the first investigator to use a poverty-line that compared household income with the cost of a minimum needs basket of goods. For Booth, the minimum needs of households varied due to differences in household structure. The minimum income necessary to meet his poverty line was between 18s and 21s per week.9 According to Booth’s classification of households in London, all those that he defined as ‘very poor’ or ‘poor’ did not have sufficient income to meet his minimum needs standards and were, therefore, in poverty.10 He defined the poor as those households ‘whose means may be sufficient, but barely sufficient, for decent independent life’ and the very poor as ‘those whose means are insufficient for this according to the usual standard of life in the country.’ He went on to describe the poor as ‘living under a struggle to obtain the necessities of life and make both ends meet,’ in contrast to the very poor who ‘live in a state of chronic want’.11 Booth believed that he had uncovered in London a special ‘metropolitan problem’ of exceptional character.12 A decade or so later Rowntree found that 27.8 percent of the population of York was in total poverty. This included all those families ‘whose total earnings are insufficient to obtain the minimum necessities for the maintenance of merely physical efficiency’ and families ‘whose total earnings would be sufficient for the maintenance of merely physical efficiency were it not that some portion of it is absorbed by other expenditures, either useful or wasteful.’13 Rowntree termed these categories primary poverty and secondary poverty.14 These accounted for 9.9 percent and 17.7 percent of the population of York respectively. Total poverty was evaluated on the basis of Rowntree’s assessment of the circumstances of families derived from his house-tohouse survey of all working-class households. It was an impressionistic measure that Lower case s denotes a shilling. Twenty shillings equal one pound.

Booth, Charles, Life and Labour of the People in London, Volume 1, Macmillan, 1892 p.62 Booth, Charles, Life and Labour of the People in London, Volume 1, Macmillan, 1892 p.33 See Veit-Wilson ‘Paradigms of Poverty’ p.195 Rowntree, B.S., Poverty: A Study of Town Life, 1901 pp.86-7 Secondary Poverty was not measured directly, but the result of subtraction (Total Poverty minus Primary Poverty).

relied upon investigators noting evidence of ‘obvious want and squalor’, intemperance or thriftlessness.15 Primary poverty was measured similarly to Booth’s poverty, by defining a set of minimum needs and then comparing household income to this poverty-line. Like Booth, his minimum needs varied according to household structure. Rowntree’s description of what merely physical efficiency meant leaves no

room for doubt about the severity of his primary poverty standard:

A family living upon the scale allowed for in this estimate must never spend a penny on railway fare or omnibus. The must never go into the country unless they walk. They must never purchase a halfpenny newspaper or spend a penny to buy a ticket for a popular concert. They must write no letters to absent children, for they cannot afford to pay the postage. They must never contribute anything to their church or chapel, or give any help to a neighbour which costs money. They cannot save, nor can they join a sick club or Trade Union, because they cannot pay the necessary subscriptions. The children must have no pocket money for dolls, marbles or sweets. The father must smoke no tobacco, and must drink no beer. The mother must never buy any pretty clothes for herself or for her children, the character of the family wardrobe as for the family diet being governed by the regulation, “nothing must be bought but that which is absolutely necessary for the maintenance of physical health, and what is bought must be of the plainest and most economical description.” Should a child fall ill, it must be attended by the parish doctor; should it die, it must be buried by the parish. Finally, the wageearner must never be absent from his work for a single day.16 Bowley developed Rowntree’s primary poverty measure in his analysis of poverty

–  –  –

Rowntree’s standard was too harsh, as it included no allowance for the consumption of meat in the diet. Bowley’s new standard also revised Rowntree’s merely physical efficiency standard by adjusting for price changes between 1899 and 1912 and revising the relative costs of children, whom Bowley believed Rowntree had treated too generously (see also Gazeley and Newell 2000). The net result of these changes is to make Bowley’s poverty line more generous for small families, but harsher than See Williams, Karel, From Pauperism to Poverty, Routledge, London.

Rowntree, B.S., Poverty: A Study of Town Life, 1901 pp. 133-4.

Rowntree’s for larger families. When analysing poverty in the new 1904 data set, we initially employ all three poverty lines, but then concentrate on Bowley’s new standard since it stands as the culmination of these studies.

2: The 1904 Board of Trade data.



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