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A new way to measure poverty shows the US falling behind Europe
- some_random 7mo ago[flagged]
- entropicdrifter 7mo agoThey compared purchasing power for an actual apples to apples comparison. Did you even read the article, or just look at the graph without context?
- croes 7mo agoCan you elaborate the obvious nonsense?
- abighamb 7mo agoThis metric makes a lot of intuitive sense and reflects the consumer sentiment I hear from neighbors. "Working more for less" isn't a new complaint, but something that measures that is interesting. I would be very interested to find out how those stats are related to things like, GINI or old pre-GDP economic measures of raw production.
- weberer 7mo agoIt is not intuitive at all to me. From the article, I can see that there's some sort of penalty by having more billionaires in the country, and that somehow leads to "the time needed to earn $1 is 63 minutes in the US", which doesn't really line up with the fact that minimum wage per hour ranges from $7-$18 depending on the state. The "old" way was to measure median net PPP per capita, which makes more sense to me: https://upload.wikimedia.org/wikipedia/commons/8/85/Annual_median_equivalised_disposable_income_per_person%2C_by_OECD_country.png https://upload.wikimedia.org/wikipedia/commons/8/85/Annual_m...
- makapuf 7mo agoThis time is a global average, including non working people or part time people.
- jltsiren 7mo agoThe figure you linked to is particularly unintuitive. It shows income per household, divided by square root of household size. There are plenty of complex and unpredictable interactions with heuristics like that. For example, if housing becomes more affordable, young people may move out sooner. Then there will be more small households with low incomes, which may bring the reported income down.
- j_french 7mo agoSterck's article from The Conversation referenced in this article: https://theconversation.com/measuring-poverty-on-a-spectrum-instead-of-an-arbitrary-line-conveys-a-more-accurate-picture-of-inequality-271912?utm_medium=article_native_share&utm_source=theconversation.com https://theconversation.com/measuring-poverty-on-a-spectrum-...
- ktoyame 7mo agoit feels counterintuitive to me that US "average poverty" dropped more than 50 percent in covid, while european stayed absolutely untouched.
- unsnap_biceps 7mo agoHow much of that could be the lack of real social nets in the US compared to Europe? In addition, anecdotally, everyone I know in the EU that had a job pre covid has a job today. I can't say the same thing about folks in the US.
- makapuf 7mo agoThe curious data point is that on this graph poverty seems to have strongly reduced during covid. Less poor.
- jeffbee 7mo agoWhy does this surprise you? There were large, direct transfers to initially children, then everyone. This was the largest and most effective American anti-poverty program of all time.
- milesskorpen 7mo agoHuge amounts of cash were given to many Americans during Covid.
- deleted 7mo ago[deleted]
- weberer 7mo agoThat's not my experience in Finland. The unemployment rate passed 10% a few months ago. Youth unemployment is now over 20%.
- tovej 7mo agoOf course, this is due to the current Finnish govt. weakening its welfare system, driving down demand and creating incentive traps. I.e. making the economy more like the US.
- wilg 7mo agoI believe this is the paper https://ora.ox.ac.uk/objects/uuid%3A501e8eb8-3ce7-4ac0-9d09-03b7cecfd16b?utm_source=chatgpt.com https://ora.ox.ac.uk/objects/uuid%3A501e8eb8-3ce7-4ac0-9d09-...
- embedding-shape 7mo agoGreat intro that quickly explains the reasoning for the proposed new measure: > Virtually everyone would agree that a 20-meter tree is twice as tall as a 10-meter tree. Conversely, everyone would agree that the 10-meter tree is twice as short as the 20-meter tree. There is no threshold or “shortness line” above or under which these relationships cease to hold: a 5-meter tree is twice as short as a 10-meter tree, a 1-meter tree is twice as short as a 2-meter tree, and so on. This reasoning remains valid when considering other multiples: a 1-meter tree is three times shorter than a 3-meter tree. To be sure, when assessing the height of a single tree, different people may disagree whether it is short or tall, as their judgment will depend on the benchmark they use for their assessment. However, when comparing two different trees, virtually everyone would make similar cardinal comparisons. In mathematical terms, shortness is the reciprocal of tallness. [...] In this paper, I apply the same logic to define a new poverty measure
- Aurornis 7mo agoThere are a lot of words that have nothing to do with the claimed measure. I'm still trying to figure out how he reached the conclusion that it takes 63 minutes to earn $1 in the US
- orangecat 7mo agoAnd it's silly. A person earning $100 a year is not "twice as poor" as a person earning $200 in any meaningful sense; both are extremely poor and will require essentially the same amount of public support. But this metric treats the difference as so huge (80 hours to earn $1 vs 40) that it drowns out any differences in the rest of the income distribution.
- IshKebab 7mo agoThis seems like a quite nice way to measure poverty.
- codethief 7mo ago> The $1 is measured in international dollars. This means it buys the same amount of goods and services in any country as a US dollar does in the United States. It is often used alongside purchasing power parity (PPP) data. The “time” refers to a day of life for anyone, at any age and in any circumstance — not just the hours worked by someone with a job. So IIUC this "average poverty" (measured in time per international dollar) includes people living off social welfare? Otherwise, if it only included the working population, wouldn't we have average poverty ≝ (average yearly income* of the working population / 1yr)⁻¹ and so it should be inversely proportional to the average yearly income* metric mentioned in the article? *) Adjusted for purchasing power, i.e. measured in international dollars.
- runako 7mo agoFrom a linked article: >For these purposes, income includes earnings from work, government benefits and other sources of money, and it is averaged among all family members. Yes, it is supposed to include income from all sources. https://theconversation.com/measuring-poverty-on-a-spectrum-instead-of-an-arbitrary-line-conveys-a-more-accurate-picture-of-inequality-271912 https://theconversation.com/measuring-poverty-on-a-spectrum-...
- codethief 7mo agoHuh, I must have missed that. Thanks!
- mwhitfield 7mo agoNo, it's average poverty ≝ average(1 / annual income) Inversely proportional to the harmonic mean of average yearly income.
- codethief 7mo agoAh, you're right. I added the (·)⁻¹ at the very end, when I noticed the units on both sides didn't agree, and forgot about the average.
- 7mo ago
- WarmWash 7mo agoI would guess this is because places like Germany having incredibly low annual working hours.[1] The bottom of the list is populated by all European countries. [1]https://en.wikipedia.org/wiki/List_of_countries_by_average_annual_labor_hours https://en.wikipedia.org/wiki/List_of_countries_by_average_a...
- adrian_b 7mo agoBeing at the bottom of that list is very desirable, because it means high quality of life, while being at the top of that list means very low quality of life. The goal of increasing work productivity must be to produce the same by working less, not to work the same in order to make higher profits for a negligible part of the society.
- nmbrskeptix 7mo ago[dead]
- AnimalMuppet 7mo agoOK, the idea is interesting, but the numbers seem completely bogus. In what world does it take the average American 63 minutes to earn $1, even one "international" dollar? I get the "international" part - purchasing power. The number still seems way off, though. In a time when minimum wage is $7/hr, how is the average American earning $1/hr? Can anyone make that number make any sense?
- hnthrow0287345 7mo ago>The “time” refers to a day of life for anyone, at any age and in any circumstance — not just the hours worked by someone with a job. So it's how much you earn per day divided by 24, or maybe by yearly earnings and hours per year
- akamaka 7mo agoNope, I just spent 15 minutes reading the original paper and can’t make any sense of what he is calculating. International dollars are normalized to USD, so there’s no conversion necessary. The figure he quotes of 63 min per dollar converts to $8343/year. However, his original paper states that he created this measure by inverting income, so the number 8343 is his starting point. The closest guess I have is that is derived from the poverty line for a family of four, $32150 (which divided by four is $8037). If that is the case, what he is really doing is comparing poverty line definitions between countries.
- rassimmoc 7mo agoYou can't compare calculations in article with minimum wage. Think of it this way, its like difference between median and average income. Larger inequality, larger the gap between median and average.
- casey2 7mo agoThis metric rates very high on my private index Compensation, Obscuring, Paltry, Earnings (COPE)
- bee_rider 7mo agoI’m as frustrated as anybody else with how the economy is going in the US. But we should be skeptical about a new metric with an intuitive name that seems to confirm exactly what we all suspect but is sort of complex to interpret/measure, right? In particular it seems weird that only we had a massive change during COVID. Also seems a little odd that Germany was always better than the US, even in the 90’s when things were pretty good here. Putting it together, we need to have COVID all the time here, so we can match the economic development of Germany immediately post-reunification.
- 9rx 7mo ago> In particular it seems weird that only we had a massive change during COVID. It is not weird if you were old enough to be aware of the news during that time. Poor people in the US suddenly coming into money and being lifted out of poverty thanks to COVID stimulus checks was front and center in the news cycle as it was happening. The other countries noted did not follow the same "hand out free money" approach. Their safety nets were built around maintaining continuity during COVID.
- Aurornis 7mo ago> It is not weird if you were old enough to be aware of the news during that time. Poor people in the US suddenly coming into money and being lifted out of poverty thanks to COVID stimulus checks was front and center in the news cycle as it was happening. A lot was written about the stimulus checks but they were so small to not matter. A $1200 check isn't going to suddenly lift a lot of people out of poverty and keep them there, even though it could be make-or-break for a few selected cases. The bigger change was that the American economy was basically turbocharged by all of the interventions going on. Remember "The Great Resignation" when everyone was changing jobs because all the companies were hiring as fast as they could? It was an ideal time to move your way into a better position in the job market.
- 9rx 7mo ago> A $1200 check isn't going to suddenly lift a lot of people out of poverty "A lot" is subjective, I suppose. Concretely, it lifted 11.7 million Americans[1] out of poverty. That makes up approximately 30% of those who were in poverty prior to the stimulus. [1] https://www.commondreams.org/news/2021/09/14/incredible-covid-stimulus-funds-reduced-overall-us-poverty-2020#:~:text=In%202020%2C%20the%20SPM%20rate,percentage%20points%2C%20according%20to%20officials. https://www.commondreams.org/news/2021/09/14/incredible-covi...
- _the_inflator 7mo ago[flagged]
- PaulKeeble 7mo agoIs the measure they are using inflation adjusted over time? If not this shows an enormous loss in purchasing capacity over time for the average person, which is certainly how its felt over the past decades as inflation has outrun wages for most people.
- laurencerowe 7mo agoAverage != median. This measure seems to be so high because there are so many low paid workers in the US due to low minimum wage. Median workers in the US have some of the highest hourly wages at PPP in the rich world and they have been increasing, but they are pretty similar to those in Germany. The big difference in annual pay at PPP is down to hours worked. For 2022 average annual hours worked per worker in the US is 1790 while in Germany it is 1340 [1]. Meanwhile average hourly wages at PPP in US are $34.9 vs $34.6 in Germany [2] [1] https://ourworldindata.org/grapher/annual-working-hours-per-worker https://ourworldindata.org/grapher/annual-working-hours-per-... [2] https://ourworldindata.org/grapher/average-hourly-earnings https://ourworldindata.org/grapher/average-hourly-earnings
- tovej 7mo agoYou forget that in the US, even with PPP, the level of "comfortable" is higher, due to missing social safety nets. This means using PPP doesn't actually show where the level of precarity is.
- laurencerowe 7mo agoLife in the US is definitely more precarious than in Europe but that has been the case for a long time while median real earnings after stagnating from about 2001 to 2015 have been growing well since then. https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q There is a huge mismatch between perception and data. I wonder whether some costs are just more pertinent?
- janalsncm 7mo agoI wonder if there’s also some difficulty in translation happening due to adding up inverted numbers for example 1/(a+b+c+…) != 1/a+1/b+1/c+…
- orangecat 7mo agoThat's exactly what's going on. The inverses are very sensitive to small changes at the low end.
- deleted 7mo ago[deleted]
- Aurornis 7mo agoThe new measure: > As of 2025, the time needed to earn $1 is 63 minutes in the US. Confused, I clicked one of the links and tried to understand. Found this: > The time to get $1 refers to a day of life for anyone at any age and in any circumstance, not just the hours worked by someone with a job. Clicking another link took me to the abstract at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4785458 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4785458 but that didn't answer any questions either. I can't find anything really of substance in this, other than someone trying to redefine a lot of terms in confusing ways $1 every 63 minutes would be $8343/year. I cannot think of any way to reconcile that with the US average household income or any other related figure.
- akamaka 7mo agoI did the same math. The closest guess I have is that it is derived from the poverty line for a family of four, $32150 (which divided by four is $8037).
- tovej 7mo agoThat's because it is the average of the "time to earn 1$" per individual. So let's say you're Elon Musk and it takes you a negligible enough time to do this that we can say that t_Elon = 0. Now say you are way below the poverty line and earn 6000$/year. This means t_Poor = 87 mins. If we average 80 t_Poor and 20 t_Elon we find we get 0.8 x 87 mins = 67 mins. Even when the average income in this case would be 0.2 x income_Elon. Something like 7 billion $/year. I hope this shows why you can't just take the inverse to get the average income. The only way that was true was if everyone earned the exact same income. Why is this a better metric? The average income is biased towards big earners, while this metric is more centered around the mode of the distribution (poor people). It captures the income distribution much better than average income.
- ffsm8 7mo agoWell, Average is indeed a worthless metric, and that's why everyone is using median for these statistics unless they're arguing in bad faith If you do want to use average, you'd at least need to remove 10% both from the top and bottom before calculating it, but it's still gonna be super untrustworthy. Not sure what to take away from your comment, I'm still unsure what kind of metric you're pitching and why it'd be a valuable thing to track
- joe_the_user 7mo agoHe finds that “average poverty is substantially higher in the US, even though average incomes are higher than in most Western European countries”. That seems like a complicated way to "talk about median income without talking about median income". By the end, they do describe the basic situation: US has greater total wealth and total income but that wealth and income is so unequally distributed that more people are poor.
- Ekaros 7mo agoCost of living and cost of goods sounds ludicrous from outside. Like rents and car payments, and insurance. And even stuff like some restaurants... Ofc, there is expensive locations outside but there is also lot more reasonable places. From outside it feels that there is something especially broken in cost wise in USA.
- charcircuit 7mo agoIt seems biased to ignore things like growth in housing prices and the stock market where we have seen some massive gains in recent years. If it's easy to invest in property or companies or bonds or treasuries or whatever to make a dollar. That should count.
- heathrow83829 7mo agothe article doesn't explain how the math works. if min wage is 15$ an hour or 10$, how do they arrive at 1$ for 63 min???
- tovej 7mo agoSee my comment elsewhere in this thread: https://news.ycombinator.com/item?id=47605141 https://news.ycombinator.com/item?id=47605141
- josefritzishere 7mo agoThe declining standard of living in the USA is has become painfully obvious. I think we're past solutions. The question is if it will go the way of Italy or the way of Yugoslavia.
- Balinares 7mo agoInteresting. I hope this catches on -- it's tough to visualize poverty in concrete terms, but assessing how long it takes a population to make a given unit of purchasing power in average is a clever idea. It's sobering to realize that it would take a friend across the sea over 100 hours to assemble the funds for a $100 bill that I wouldn't look at twice... Although I wish this sparked a conversation on how we can do better instead of national dick measuring contests. Those don't help.
- FeloniousHam 7mo agoThis sounds like so much Eurocope: https://www.noahpinion.blog/p/eurocope https://www.noahpinion.blog/p/eurocope
- rexpop 7mo agoIt doesn't make sense to talk about poverty in the US without talking about race (or, ok, for you libertarians in the audience: "geography"). It certainly doesn't make sense to average the economic standing of a population split between imperial core and colonized enclaves.
- stefantalpalaru 7mo ago[dead]
- jeremie_strand 7mo ago[dead]
- jeremie_strand 7mo ago[dead]
- ozgurds 7mo agoBut measuring only the earning of 1 usd is enough ? Or should we take into construation that how much 1$ can buy in real life