Posts Tagged ‘poverty crisis’

Poverty in America

September 21, 2011

“It’s official: There are now more poor people in America than at any other time in the 52 years records have been kept.  We knew that the 2010 poverty numbers released by the Census Bureau on sept. 13 weren’t going to be good.  They turned out to be, in the words of brookings senior fellow Ron Haskins, ‘extraordinarily bad.’  More than 15% of Americans live below the poverty line.  The total rose for the fourth consecutive year.  For a family of four, poverty means scraping by on roughly $22,000 a year.” Rana Foroohar, ‘The Truth About the Poverty Crisis’, Time, September 26, 2011

Now let me be clear. It is never going to be comfortable for an individual or a household to be located at the bottom of the income pyramid anywhere in the world. Whether the poverty is absolute or relative it is bound to hurt those who suffer from it. And it is insensitive, and indeed unwise, for those who find themselves higher up the ladder to make light of the suffering that is involved.

However, there is a big difference between absolute poverty and relative poverty and that difference, also, should not be ignored. By absolute poverty, I mean a level of income that is insufficient to provide sufficient calories for a healthy human body, that is insufficient to provide minimal shelter and minimal protection from excessive heat or excessive cold, that is insufficient to provide basic education for children, basic health maintenance, and necessary contact with other members of the society.

Only by choice does anyone in the United States suffer from absolute poverty thus defined. The government provides schooling for the young, food stamps for the impoverished, medicaid for the poor and sheltered housing for many of those displaced from other forms of accommodation. These provisions are not accounted for in the nominal incomes that define relative poverty in the United States. In and of themselves, they go far to ensure that absolute poverty does not inflict anyone save those who choose to live as vagrants on the streets and out of reach of the social service providers.

So what does relative poverty, as defined by the Census Bureau for a family of four in the United States, actually mean? How does $22,000 per annum for such a family compare with average household incomes in the United States and elsewhere?

Well, the median household income in the United States is approximately $50,000 per annum. So the impoverished family is living less than half as well as the average household. And that will not be comfortable in a country where comparative living standards are transparent to all.

But the United States is a rich country, ranked ninth in the world both by the International Monetary Fund and by the World Bank for 2010. So $22,000 per annum looks a lot better as we slide not so very far down those rankings. Specifically, to The Bahamas, ranked number 31 in the world, with an average annual household income of $21,879, which is below the U.S. poverty line.

Ranked in descending order from The Bahamas, we find Portugal ($21,559), South Korea (20,591), Bahrain ($20,475) all in the low 20s.  Not too far below in the rankings, but significantly worse off in terms of the numbers, we find Czech Republic ($18,288), Croatia ($13,720), Hungary ($12,879) and Chile ($11,828).

So an impoverished household in the United States lives twice as well as the average household in Chile. And Chile is viewed as an up-and-coming relatively affluent country even by the upwardly mobile standards of Latin America.  The world’s average household income in 2010 was $9,218, significantly less than one half of the poverty line household income for the United States. The median household income in the People’s Republic of China is less than one-third of the U.S. poverty line. The cost of living in China exceeds that in the United States, and government-provided social services for the Chinese poor are virtually non-existent.

So is the U.S. poverty glass half empty or half full?  Half empty in the sense that impoverished households live half as well as  average U.S.  households. Half  full in the sense that such impoverished households live twice as well as the average Chilean household,  and three times as well as the average Chinese household.

So if one has to be poor in this world, it is  better to be poor in the United States than almost anywhere else. Cold comfort to be sure. But far better than what might otherwise be the case. The grass does not appear to be greener on the other side of the poverty street.


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