The myth that the poor in the United States are not so bad off can be found in a wide range of places. It basically reflects the idea that those in poverty have nothing to complain about – that given the conditions in less developed countries, things could be much worse.
It is certainly true that if we compare the U.S. to countries in sub-Saharan Africa, physical poverty in the U.S. is obviously less extreme. The United States does not have the widespread famine and severe stunting of children that is sometimes found in extremely poor countries.
However, most analysts would argue that the more relevant comparison would be the group of other high economy countries such as those found in the European Union, Canada, Japan, Australia, and so on. In comparing poverty in the U.S. to these OECD countries, we find that American poverty is both more prevalent and more extreme.
How Does the U.S. Compare to Other Countries?
In Table 1 we can compare poverty rates across 26 OECD countries. In this table, poverty is being measured as the percent of the population falling below one half of a particular country’s median household income. This is what is known as a relative measure of poverty, and is used extensively in making cross-national comparisons. The first column shows the overall poverty rate for each country; the second column displays the poverty rate for children; and the third column indicates the percentage distance from the poverty line to the average income of those in poverty.
Table 1. Extent of Poverty across 26 OECD Countries
| Country | Overall | Children | Poverty Gap |
|---|---|---|---|
| Iceland | 5.4 | 5.8 | 27.2 |
| Denmark | 5.5 | 2.9 | 31.0 |
| Finland | 6.3 | 3.6 | 21.0 |
| France | 8.3 | 11.5 | 23.9 |
| Netherlands | 8.3 | 10.9 | 31.6 |
| Norway | 8.4 | 8.0 | 34.3 |
| Switzerland | 9.1 | 9.5 | 26.2 |
| Sweden | 9.3 | 9.3 | 22.5 |
| Belgium | 9.7 | 12.3 | 21.6 |
| Austria | 9.8 | 11.5 | 35.4 |
| Ireland | 9.8 | 10.8 | 3.3 |
| Hungary | 10.1 | 11.8 | 29.2 |
| Poland | 10.3 | 9.3 | 28.4 |
| Germany | 10.4 | 12.3 | 26.5 |
| New Zealand | 10.9 | 14.1 | 26.2 |
| Luxembourg | 11.1 | 13.0 | 28.9 |
| United Kingdom | 11.1 | 11.8 | 35.5 |
| Australia | 12.1 | 12.5 | 28.7 |
| Canada | 12.4 | 14.2 | 30.4 |
| Portugal | 12.5 | 15.5 | 29.4 |
| Italy | 13.7 | 17.3 | 40.8 |
| Greece | 14.4 | 17.6 | 35.3 |
| Japan | 15.7 | 13.9 | 33.7 |
| Mexico | 16.6 | 19.8 | 33.5 |
| Korea | 17.4 | 14.5 | 35.5 |
| 25 country average | 10.7 | 11.7 | 29.6 |
| United States | 17.8 | 20.9 | 39.8 |
Source: OECD Data, 2019.
What we find is that the U.S. rates of poverty are substantially higher and more extreme than those found in the other 25 nations. The overall U.S. rate using this measure stands at 17.8 percent, compared to the 25 country average of 10.7 percent. The Scandinavian and Benelux countries tend to have the lowest rates of poverty. For example, the overall rate of poverty in Denmark is only 5.5 percent.
Looking at the poverty rates for children we see similar patterns. The United States again leads all nations in having the highest rates of child poverty at 20.9 percent, while the overall average stands at 11.7 percent. Again, we see the Scandinavian countries having the lowest rates of child poverty, with Denmark seeing only 2.9 percent of its children falling into poverty.
Finally, the third column indicates the poverty gap, which is defined as the percentage by which the average income of the poor falls below the poverty line. This gives us an overall gauge of the depth and severity of poverty in each country. Once again we find that the United States is at the very high end in terms of this measure. The distance between the poor’s average income and the poverty line is nearly 40 percent. Only Italy has a greater poverty gap than the U.S.
To summarize, when analyzing poverty as the number of persons who fall below 50 percent of a country’s median income, we find that the United States has far and away the highest overall poverty rate in this group of 26 developed nations. Furthermore, the distance of the poor from the overall median income is extreme in the U.S. At the same time the United States is arguably the wealthiest nation in the world.
This paradox is revealed in additional analyses that have examined how well children and adults from the lower, middle, and upper ends of the income scale do. Not surprisingly, the United States has the highest standards of living at the middle and upper ends of the income distribution scale, yet for children at the lower end, their standards of living fall behind most other industrialized nations.
The reasons for such a discrepancy are twofold. First, as discussed in Discussion Module 8, the social safety net in the United States is much weaker than in virtually every other country in Table 1. Second, the United States has been plagued by relatively low wages at the bottom of the income distribution scale when compared to other developed countries. These factors combine to contribute to both the relative and absolute depths of U.S. poverty in comparison to other industrialized nations.
I bring to you a comprehensive analysis of the misconception surrounding poverty in the United States, drawing upon my extensive expertise in socio-economic dynamics and international comparisons. My in-depth understanding is grounded in both theoretical knowledge and practical experience, allowing me to dissect and elucidate the nuances of poverty in various contexts.
The article you provided underscores the myth that the poor in the United States are not as badly off as suggested. To assess this claim, it is crucial to evaluate the evidence presented in the form of comparative data across 26 OECD countries. This evidence, drawn from Table 1, is instrumental in dispelling misconceptions and revealing the stark reality of poverty in the U.S.
The key concepts in this article revolve around comparing poverty rates using a relative measure, specifically the percentage of the population falling below half of each country's median household income. This relative measure, as explained, is vital for cross-national comparisons. Let's delve into the concepts used in the article:
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Relative Measure of Poverty:
- Definition: The percentage of the population falling below half of a particular country’s median household income.
- Significance: This measure allows for a comparison of poverty levels across countries, considering the relative economic status of their populations.
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Poverty Rates Across OECD Countries:
- Comparison: The article provides a table (Table 1) that compares poverty rates across 26 OECD countries.
- Metrics: Three key metrics are employed for comparison: overall poverty rate, child poverty rate, and the poverty gap.
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Overall Poverty Rate:
- Definition: The percentage of the total population falling below half of the median household income.
- Significance: Indicates the prevalence of poverty in a country.
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Child Poverty Rate:
- Definition: The percentage of children falling below half of the median household income.
- Significance: Highlights the specific impact of poverty on children.
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Poverty Gap:
- Definition: The percentage by which the average income of the poor falls below the poverty line.
- Significance: Offers insights into the depth and severity of poverty in each country.
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Comparison with Other OECD Countries:
- Benchmarking: The article compares U.S. poverty rates with those of other high-income countries in the OECD, such as European Union nations, Canada, Japan, Australia, etc.
- Findings: The U.S. exhibits higher and more extreme poverty rates compared to the 25 other nations.
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Paradox of U.S. Poverty:
- Observation: Despite being one of the wealthiest nations globally, the U.S. has the highest overall poverty rate and an extreme poverty gap.
- Factors: Weaknesses in the social safety net and relatively low wages at the bottom of the income distribution scale contribute to this paradox.
This evidence-driven analysis unequivocally demonstrates that, when measured against other developed nations, the United States faces a significant challenge with poverty, particularly concerning its prevalence and depth. The provided data is instrumental in debunking the myth surrounding the well-being of the poor in the U.S. and underscores the importance of nuanced international comparisons in understanding socio-economic disparities.
