The UN's Absurd Measure Of US Poverty

Authored by Ryan McMaken via The Mises Institute,

The United Nations is at it again with yet another report on how bad poverty is in the United States - and how things would improve greatly if the US raised taxes. This time, the UN denunciation of the US has raised the ire of US ambassador Nikki Haley who has called the report "patently ridiculous."

Specifically, Haley was responding to a June 18 report by UN bureaucrat Philip Alston. Alston concluded that poverty rates in the US are among the worst in North America or Europe.

How did Alston come to this conclusion?

Well, first of all, it's important to note that he didn't collect any new information.

The report comes at the end of a two-week visit to the United States conducted back in December of 2017. At the time, Alston released a similar preliminary report.

The new report to the UN Human Rights Council is just an update of the old report.

Moreover, Alston could have easily authored the report had he just stayed home. The report is based simply on existing data already collected and published by agencies such as the US Census Bureau and the OECD. Amy undergraduate could have written a similar report using data he found online.

One example of this method is found in Alston's reporting on poverty.

According to the report:

About 20 per cent of children live in relative income poverty [in the United States], compared to the OECD average of 13 per cent.

Here, Alston has essentially cut and pasted text from an existing OECD report. There's nothing wrong with this, per se, except for the fact that Alston has implied he has recently completed a thorough survey of poverty in the United States — even though he clearly hasn't.

This November 2017 report from the OECD reads:

[C]hild relative income poverty rates are very high – around 20% of children in the U.S. live in relative income poverty, compared to just over 13%, on average across OECD countries.

The report also includes this graph:

But there's a problem here with Alston's use of the data. The OECD report refers to "relative income poverty," which isn't what most people think it is. Most people would think a poverty rate should measure incomes against the cost of maintaining a certain basic living standard. But this "relative" poverty measure isn't that sort of measure. It's just a measure of how many people in a country make 50% or more of that country's median income level.

So, if you have country with a very low median income, and a very low standard of living, it's possible to have very low poverty rates — so long as most people make more than fifty percent of that country's lousy median income level.

This allows the OECD to claim — as it does in the graph — that the US has higher poverty rates than Mexico.

In order to understand this more fully, let's look at the OECD's own measure of disposable median income for each of its member countries (2015 data) in Graph A:

These numbers include both ordinary wage income and also cash assistance from welfare programs. It is also adjusted for local purchasing power and rendered in international dollars.

Now, note in the footnote of the OECD graph above that you're poor — regardless of where you are — if you make 50 percent of the local median income. So, 50 percent of the median income in Greece (with a median income of $13,000) or 50 percent of the median income in Norway (with a median income of $39,000) are both simply "poverty."

But let's look at just how huge these differences can be.  If we look at incomes at the 50 percent level for each country, we get in Graph B:

If you're going to be poor by this measure, you'll have a higher income in the US than in many other places. For example, the poor in the US at the median poverty level have incomes 34 percent higher than the median poor in Italy. When comparing the US and Spain, the US comes in at 40 percent higher.

Put yet another way, if you make $15,000 in the US, you're poor. But if you make $15,000 in France, Germany, the UK, or Italy, you're not poor. Why? Because the overall median incomes in those non-US countries are lower.

Basically, by this measure, poverty has little to do with what resources you have at your disposal. It's more or a measure of how much you're making compared to how much other people are making. It's a measure of income inequality, not poverty. 

The problem with making comparisons this ways can also be illustrated by looking at the US poverty-level income compared to the median income from other countries. For example, the US poverty-level income is so high it's at 70 percent of the median income in Spain and 67 percent of the median income in Italy in Graph C:

If you have a median poverty-level income in the United States, your income is 95 percent the size of the median income of all households in Portugal. Stated broadly, we might say that poor households in the US have pretty much the same income as the overall population in Portugal. Or, one might say the median poverty income level in the US is nearly two-thirds as high as the overall median income of everybody in the United Kingdom.

Clearly, if a poor household in the US has an income 40 percent higher than a poor household in Spain — then these two types of "poverty" are not the same.

Measuring Poverty by Actual Standards of Living

A more honest way to measure poverty would be to look at actual indicators of the standard of living. This would include household amenities, living space, labor-saving appliances, entertainment, and so on.

For example, living space in the US, even among the poor, is measurably more plentiful than elsewhere. As noted by Robert Rector at the Heritage Foundation:

Housing space can also be measured by the number of square feet per person. The Residential Energy Consumption survey conducted by the U.S. Department of Energy shows that Americans have an average of 721 square feet of living space per person. Poor Americans have 439 square feet. Reasonably comparable international square-footage data are provided by the Housing Indicator Program of the United Nations Center for Human Settlements, which surveyed Housing conditions in major cities in 54 different nations. This survey showed the United States to have, by far, the most spacious Housing units, with 50 percent to 100 percent more square footage per capita than city dwellers in other industrialized nations.

America's poor compare favorably with the general population of other nations in square footage of living space. The average poor American has more square footage of living space than does the average person living in London, Paris, Vienna, and Munich. Poor Americans have nearly three times the living space of average urban citizens in middle-income countries such as Mexico and Turkey. Poor American households have seven times more Housing space per person than the general urban population of very-low-income countries such as India and China.

As Rector notes, "There is a vast gap between poverty as understood by the American public and poverty as currently measured by the government." This is due to a wide variety of reasons. One reason is that income surveys don't count non-cash poverty relief programs. This means programs like Medicaid and food stamps aren't included in the incomes of low-income households in America. That makes those incomes looked significantly lower than they are. 

Poverty measures also can't take into account heads of household who have low incomes, but also don't have a mortgage because they're paid off their houses already. This is not an insignificant factor in measuring poverty among the elderly. 

All of this is important because in Alston's report to the UN, he relies on US government data using the traditional poverty-rate measures. He then combines these with the OECD's "relative" poverty measures to conclude that poverty is "shockingly" widespread in the United States. 

A closer look at the data, though, suggests things are more complicated. 

None of this is to say that poverty doesn't exist anywhere. Of course is exists, and issues like homelessness and true poverty are real for some people. Sweeping claims like those by Alston tell us very little, however, about the real state of poverty in the US. 

Comments

ted41776 EuroPox Thu, 06/28/2018 - 19:10 Permalink

if the UN gave some of the $8,000,000,000+ it gets from the US alone every year back to Americans, maybe we would have less poverty. and if they got the fuck out of the US altogether, New York City could have a giant campus in downtown Manhattan that could be used to house the homeless and fight poverty instead of giving politicians and diplomats a place to bang hookers and snort coke

In reply to by EuroPox

techpriest ToSoft4Truth Thu, 06/28/2018 - 19:54 Permalink

Great article about how numbers are manipulated when computing "poverty" statistics. The UN was always a cesspit of title-seekers (why be any old bureaucrat when you can be a GLOBAL bureaucrat?), but one function I'm seeing is that any time certain elements want a policy pushed in the US, they get some title-seeking "experts" to cook up a "study" in which the only conclusion is for the US to do what the UN's influencers say.

In reply to by ToSoft4Truth

TeethVillage88s techpriest Thu, 06/28/2018 - 20:22 Permalink

Might as well show OECD Health Care costs... USA just over took Luxembourg in 2017... with Obama Care... of course the NEJM & JAMA studies show hospital mistakes are like 200,000 per year which makes them like # 3 in cause of deaths... Zerohedge should post my research if they are not bought out by Lobbyists, Foreign Agents, or Interest Groups like CFR, Trilateral Commission, Atlantic Council...

- intentionally left blank - Do your own research

In reply to by techpriest

rtb61 shemite Thu, 06/28/2018 - 21:11 Permalink

You people are nuts. Fantasise all you want about crazy economics you are about to find out the hard way why you are so wrong, now would be the time to emigrate from the US, if you want a less uncomfortable life for about the next three decades possibly out to five decades of austerity lead, high crime, economic collapse.

In reply to by shemite

Yen Cross Thu, 06/28/2018 - 19:12 Permalink

  The United nations is NOTHING more then cover for global  NGO's and their nefarious activities.

 The U.N. wouldn't even exist if not for the United States and it's contributions.

  Let China take it over, and the U.S. can be involved unilaterally, similar to-current- trade talks with countries on an individual basis.

  We have massive military/intelligence presence globally. Imagine the amount of $usd that could come home and help people domestically.

  It would also wean the takers, and force them to be more fiscally responsible.

  What Mother lets her child suck on her teet for 60-70 years? It's time for Europe to stand on their own legs.

 

shizzledizzle Thu, 06/28/2018 - 19:21 Permalink

Niggas ARE broke these days... A great deal of the poverty is self inflicted though. Sadly there are people that make good money and go into insuperable debt because they want the latest greatest RIGHT now. On the other side of the spectrum there are people who intentionally avoid upward mobility because it would take them out of goverment programs. Wealth is still out there to be had if you are willing to work for it and practice some degree of financial prudence.

GoldmanSax Thu, 06/28/2018 - 19:52 Permalink

There is a base under the UN building. They had guards posing as homeles people. How can homeless people live under a building that the richest and most powerful people in the world conduct bussiness? You can also see subs going in and out near the building. Technoloy sees their heat signature pretty easily. 

GoldmanSax Thu, 06/28/2018 - 19:56 Permalink

America has millions of empty homes and we have a homeless problem? The banks repo'd all those homes and sat in them to keep the bubble from popping. The currency has depreciated so much, people can't make medical, rent, food, and transportation. This is the end of this currency. A default is eminent.

MK ULTRA Alpha GoldmanSax Thu, 06/28/2018 - 21:11 Permalink

If the Pentagon is housing 12,000 illegals, then the Pentagon can house homeless people.

The number of homeless is between 500K and 600K.

When the military closes surplus bases, some just deteriorate. It would be good to start preparing a civil defense base system to be used to house American refugees.

The real homeless number is much higher, and when those living in cars, trucks, RVs and campers are included the number of homeless would be in the millions. One reason is senior homelessness, they're more likely to live in a vehicle because they're receiving a small social security check.

Homeless could live in barracks and buildings on surplus or closed bases performing maintenance in exchange for food and housing.

The US governments plan for us in a national emergency is basically to use FEMA to herd us to holding areas. That's not a strong civil defense system. Essential the US has no civil defense system of bases for housing in a national emergence.

So illegals get housing and America's dirt poor and senior homeless have no place to go. I wonder what the Democrats think about the increasing number of US homeless compared to the invading armies of illegals requiring long term government social services. It means the US isn't providing for it's own people but they're more than willing to spend our last dime on foreigners, NATO and wars for Israel.

It's sick.

In reply to by GoldmanSax

waspwench MK ULTRA Alpha Thu, 06/28/2018 - 21:49 Permalink

If the Pentagon were not wasting resources housing 12,000 illegals then the Pentagon could indeed house the homeless.   Let me, however, take this a step further.   If our government were not providing food, medical care, dental care, education & ad infinitum for illegals, and if our government were to seriously prune our foreign aid budget, then all these resources could be directed to American citizens.

There are a lot of Americans who are in in dire need of medical care.   There are Americans who have lost their jobs because of out-sourcing and who need assistance to make a transition into a new career, Americans with children even who are living out of their vehicles and eating poor quality food.   In short, a lot of our own people are suffering and we are bringing in thousands of unhealthy, uneducated, unskilled, low IQ people who will spend their entire lives on our welfare rolls.

This has to stop.   I want to help my fellow Americans first and foremost.   The rest of the world can wait.

I like your idea of using  surplus and closed bases and I especially like your idea of a civil defence system.   We are not prepared as we should be for the various disasters to which we might find ourselves subjected.    Homeless living on bases could be trained for civil defence and would probably be happy to be doing something productive.

In reply to by MK ULTRA Alpha

AKKadian Thu, 06/28/2018 - 21:06 Permalink

The bums on the street in America look better than most upper middle glass in 80% of the world and growing. The UN lies for a living. What the filthy Phucks are really saying give us your tax dollars or we will tell the world America is a ShitHole. Gawd dam lousy freaks, we gave you our tax dollars and you called us a Shithole. Stinking filthy maggots.!!!

waspwench Thu, 06/28/2018 - 21:27 Permalink

Lies, damn lies and statistics.  

Everyone knows by now that one can prove anything with statistics.

US taxes are none of the UN's business.    US gun laws are none of the UN's business.   In fact nothing in the entire US is any of the UN's business.      

BTW maybe we should stop wasting money on the UN and use it to reduce the appalling poverty rates in the US.   :)))

Old Poor Richard Thu, 06/28/2018 - 23:28 Permalink

" Put yet another way, if you make $15,000 in the US, you're poor. But if you make $15,000 in France, Germany, the UK, or Italy, you're not poor. "

Which is fucking laughable since the cost of living is higher in those European countries.   It's unbelievable that these UN reports are being written by adults.  UN==leftist==illiterate and innumerate.

Posa Thu, 06/28/2018 - 23:30 Permalink

The US absolutely DOES need to tax the Predator Class (1% - .01%) that has gobbled up huge chunks of national income and assets... by hoarding such wealth and piling it into asset inflation, national consumption has been greatly inhibited and with that  investment in productivity enhancing technology, plant and equipment.

Making sure that everyone pays the 7% deduction for Medicare- SocSecurity is another important measure ... if a guy with kids pays 7% of his measly $50K salary, the guy making $5B should pay the same rate... pretty soon these entitlements become solvent.

Hope Copy Fri, 06/29/2018 - 00:49 Permalink

The UN need to be kicked out of NYC.  On a boat, on an Island, but not part of a major metropolitan area full of every sinful indulgence possible..