The steep and winding road to comparable reference budgets in Europe

This chapter discusses Tim Goedemé's cross-national research work in order to establish reference budgets for EU member states and facilitate the European Commission's (EC) task of monitoring income adequacy in Europe. It focuses on the “Improving Poverty Reduction in Europe” (ImPRovE) project that worked closely with six country teams based in Antwerp, Athens, Barcelona, Budapest, Helsinki and Milan. It also looks into the development of more comprehensive reference budgets that span all expenditures needs in both food and non-food. The chapter reflects on the key lessons and contributions from the ImPRovE project and discusses some of the issues on establishing a common language and “standardized” approach. It suggests how approaches on reference budgets strengthen EU social protection systems and social indicators and provide new sociological insights into European societies and public attitudes.

Establishing a national standard: the role of the UK’s Minimum Income Standard in policy and practice

This chapter promotes the UK Minimum Income Standards (MIS) as a benchmark in social policy and practice. It explains how the MIS research continues to have a strong influence over social policy debates in Britain and exposes the inadequacy of the national minimum wage that helped fuel the campaign for a “living wage.” It also features MIS as a key element in the new Scottish measure of fuel poverty. The chapter observes how MIS has not been taken up by governments as a standard for setting or targeting minimum incomes in terms of social protection. It observes that it will require a major political commitment to redistribution if the British government were to adopt MIS.

The Slovenian experience with three methods for defining the minimum income

This chapter examines the Slovenian experience with three methods for defining minimum income standards. It suggests that all three approaches were expert-led, normative, and were intended to cover “basic needs.” It also talks about the approach on developing basic needs for reference budgets from the late 1970s and early 1980s, which was based on expert deliberations and analysis of family expenditure surveys that indicate consumptions patterns. The chapter explains how the food basket was determined by nutrition experts while a normative approach was adopted for heating and lighting, clothing and footwear, home appliances and furniture, and leisure. It discusses the “food-share” method, which is based on the cost calculations for a minimal diet with a proportion added for other non-food necessities.

Minimum budgets for Danish families

This chapter reports on minimum reference budgets for Danish families. It discusses the first versions of the Danish minimum reference budgets that were produced in the 1990s and followed the Low Cost but Acceptable (LCA) approach. It also explains the Danish reference budgets that represent consumption expenditures associated with a modest but still healthy and basic social life for different families and households. The chapter looks into the deliberations of expert groups in order to define the necessary requirements for living a modest but still healthy life, and reference budgets that cover ten different family or household groups. It compares the Danish reference budgets against the Norwegian reference budgets as both follow similar expert-led procedures.

Measuring poverty in the Netherlands: the generalised reference budget approach

This chapter looks into generalised two reference budgets for measuring poverty in the Netherlands. The first, a “basic needs” budget, is based on the expenses that can be regarded as the minimum necessary standard in the Netherlands. The second is a Modest but Adequate (MBA) reference budget, which is more generous and takes into account the minimum cost of recreation and social participation. The chapter clarifies how the both the budgets are first determined for a single household and then derived for other household types by applying equivalence scales. It also explains that the reference budgets are based on the deliberations of experts, informed by administrative data, and national expenditure surveys.

Minimum income research in Japan: its development and political implications

This chapter provides an overview of the current state of reference budget research in Japan. It reviews the first “Minimum Income Standards Japan” (MIS), which was conducted between 2010 and 2013 and detailed all things that are necessary to live in a manner that is minimally acceptable. It also describes how the research initiative and results have influenced the context of the political debate around social security in Japan, which have not resulted in political action to strengthen social protection systems. The chapter analyzes the MIS research that originally formed part of the wider review of social security in Japan, under the centrist Democratic Party. It also points out how the momentum for social security reform was lost after the Democratic Party lost the 2012 election to the current conservative Liberal Democratic Party.

Minimum Income Standards in the Basic Income debate

This chapter explores the concept or idea of “basic income” in relation to the growing work on reference budget standards, particularly in relation to the Minimum Income Standards (MIS) findings in the UK context. It confirms whether basic incomes should be paid to every individual at MIS levels or whether a Universal Basic Income (UBI) scheme as a whole should raise family incomes to the levels of the MIS. It also investigates what approach is both feasible and affordable to bring families and households closer to the MIS. The chapter marks new territory in the UBI debate, taking some of the first steps to join up important debates and explore issues surrounding UBI, MIS and reference budgets, both in theory and in practice. It discusses the feasibility of paying basic incomes at levels defined by the published MIS reports.

The Swedish Consumer Agency’s calculations of reference values for some of the most common household expense categories

This chapter reviews the work of the Swedish Consumer Agency in producing “reasonable living expenses.” It provides an example of an expert-led reference budget standard that is grounded in social statistics and behavioural data, and supported by work with social surveys and focus groups. It also explains the Swedish Consumer Agency's work of calculating the costs of the goods and services that households usually need in order to achieve a “reasonable standard of living.” The chapter demonstrates the calculations that cover both individual and common household costs, focusing on the basic needs required to live decently in Sweden. It points out that the reference budget standards and values are ascertained from official statistics and information produced by research institutes, agencies, and expert organisations.

Basic needs budgets in policy and practice

This chapter takes up the history and development of standard “basic needs” budgets in the US. It explains in detail why the focus remains only on basic survival needs in the US context. It also points out how basic needs budgets are largely left to state governments and their agencies in order to develop family budget standards for their state in the absence of national action by the federal government. The chapter illustrates the overwhelming lack of economic security and social protection in the US, which caused many households to struggle in coping with incomes below the most basic of living standards. It mentions a new poverty line that comprises of an allowance for food, clothing, and shelter, which would be updated annually based on changes in the consumption of necessities by a reference group of families in the general population.

Adequate income in Portugal: a comparison of two estimation methods

This chapter examines the adequate income in Portugal by comparing “Improving Poverty Reduction in Europe” (ImPRovE) and Minimum Income Standards (MIS). It discusses how the MIS approach places great emphasis on the results of the focus group discussions for establishing a consensual income standard for society, while the ImPRovE method puts experts in the driving seat and focus groups are largely confirmatory. It also provides a comparison of MIS and ImPRovE's food budget results. The chapter looks into the cost of the food basket for both a man and a woman, and a couple, that is found to be higher when using the ImPRovE methodology compared to MIS approach. It covers findings that highlight some of the main differences of MIS and ImPRovE in terms of food basket composition or quantities of different groups of food.