Alexandria Ocasio-Cortez

[tantric superman 4667]

OSHA -

12 minutes ago, Incredulity said:

The government already requires conscience and morality through OSHA, DOL, SEC, EPA, ..........

 

OSHA and DOL regulations are there to assist in avoiding disruption in interstate commerce by lessening, respectively, injuries and workplace disruptions.  EPA is clearly designed to maintain natural resources, again in the long term preservation of valuable interstate commerce.  SEC is so the markets aren't disrupted as well.

Creating a military and police force are every bit a conscience and morality endeavor as are these. 

[Incredulity 11559]

Are you arguing that those tasks don’t have a basis in morality and conscience?

[Thetexashammer 1062]

Soooooo..........still no sex tape?

[tantric superman 4667]

1 hour ago, Incredulity said:

The government already requires conscience and morality through OSHA, DOL, SEC, EPA, ..........

I'm arguing this is a pretty dumb statement to the extent those statutes, more than others, require moral or "conscience" on the part of the citizen. 

[FondrenRoad 4378]

5 hours ago, this said:

And why is income gap a problem? Other than your jealousy, I mean. Especially when the middle class lifestyle in US will classify as upper middle class  or better in almost all countries in the world including your beloved Western Europe. Here's a liberal source that blows your assinine, stupid argument out of water: http://www.pewresearch.org/fact-tank/2017/06/05/through-an-american-lens-western-europes-middle-classes-appear-smaller/

While the U.S. middle class may be smaller than those in Western Europe, its standard of living – as measured by its median income – is higher. That raises a question: What shares of adults in Western European countries have the same standard of living as the American middle class? In other words, what would the middle-class share in Western European countries be if the middle class were defined as adults living in households with the same incomes as middle-class households in the U.S.?

In 2010, middle-class households in the U.S. had incomes ranging from $35,294 to $105,881 – that is, two-thirds to double the overall median income of $52,941. This U.S. standard can be applied to any country in Western Europe after incomes are adjusted for cost-of-living differences across countries. (Incomes in this analysis are adjusted to reflect a household of three and are expressed in 2011 prices. They are also converted to purchasing power parity dollars, which adjusts for cost-of-living differences across countries. For more, see full methodology.)

When the Western European countries the Center analyzed are viewed through the lens of middle-class incomes in the U.S., the share of adults who are middle class decreases in most of them. The greatest decline is in Italy, where the middle-class share in 2010 falls from 67% under that country’s national income standard to 44% under the U.S. income standard. In other words, 44% of Italians had the same standard of living as 59% of Americans who were in the middle class in 2010.

Also Germany doesn't have the innovation, the capital markets or the consumer markets to fuel that gap which keeps their wealthiest uh, not so wealthy compared to the American wealthy. 

And as if all of this wasn't enough, US also has a larger upper middle class than these bastion of economic heavens according to you Bernies. 

In summation, European economics is something we DO NOT WANT. It is a step down. 

But carry on with your ignorance. 

 

My jealousy? Lol. I'm jealous of nothing. I'd guess that I make at least 4 times your yearly income but that's irrelevant. I'm a producer and you're a cost center. And youre comparing us to fucking Italy? Lol. 

The problem here is that you make 15 an hour while working your ass off for a guy pulling in 500 an hour and you think you're better than the guy at your office who sweeps the floors. But you arent better, and at the end of the day, if the guy who sweeps the floors cant feed his kids, he is going to take it out of your ass. 

European economics is not a step down.  Theres a reason that all of America's biggest producers support it. But I guess it's really terrible that a non producing middle manager or salesperson like yourself cant get rich in Europe.

How good a sales guy are you?  I can pay you better than Putin, but I'm not really liking what I see out of you so far.

[Guest]

Rocko as fuck...   Why don't y'all just post your paystubs?

[Buzzrock 14870]

That's sort of intriguing.  First objection is that it would presumably be a federal law, when corporation law is all state, and that is more than a technical problem, I think it probably has a constitutional dimension.  Also, I tend to think that employee board members might tend to rapidly become "captured" by board interests, that is, become fatcats rather than advocates for the little guy.
A more interesting proposition might be to give voting shares/interests to employees.

I wonder how often employees of public companies are not shareholders. ESPP’s seem pretty common.

[Buzzrock 14870]

We need to change the purpose of a corporate board of directors. They should have a duty not only to shareholders, but also to stakeholders, i.e., employees.

Why? My company owes me a paycheck and some benefits that we agreed to when I was hired, nothing more. During my career when companies have become unpleasant to work for or I’ve found a better deal I’ve left and struck a new deal.

[Hugo Stiglitz 23356]

55 minutes ago, Buzzrock said:

 

Why? My company owes me a paycheck and some benefits that we agreed to when I was hired, nothing more. During my career when companies have become unpleasant to work for or I’ve found a better deal I’ve left and struck a new deal.

 

Because corporations behave like sociopaths when they are only beholden to their quarterly earnings reports/shareholders.  

If you’re into that kind of thing, knock yourself out but it’s not really in the best interests of society or improving quality of like when Gordon Gecko buys your company out.

[Incredulity 11559]

7 hours ago, tantric superman said:

I'm arguing this is a pretty dumb statement to the extent those statutes, more than others, require moral or "conscience" on the part of the citizen. 

Regulations, such as wage and hour rules, FMLA, and labor laws are the imposition of societies conscience and morality on businesses.

[RayDog 682]

21 minutes ago, Incredulity said:

Regulations, such as wage and hour rules, FMLA, and labor laws are the imposition of societies conscience and morality on businesses.

In other words corporations are evil unless regulated.

[Onboard 2.0 9083]

2 minutes ago, RayDog said:

In other words corporations are evil unless regulated.

Can be when profit trumps following the law, legal and moral laws.

[Incredulity 11559]

3 minutes ago, RayDog said:

In other words corporations are evil unless regulated.

People certainly can be.

[Buzzrock 14870]

41 minutes ago, Hugo Stiglitz said:

Because corporations behave like sociopaths when they are only beholden to their quarterly earnings reports/shareholders.  

If you’re into that kind of thing, knock yourself out but it’s not really in the best interests of society or improving quality of like when Gordon Gecko buys your company out.

Some companies, sure. But those companies have to compete hard for talent (especially those darn entitled millennials) and most people don't like to work for sociopaths. Corporate culture and employee experience are huge CEO initiatives right now. I'd prefer to let the market sort it out.

[this 107]

6 hours ago, FondrenRoad said:

My jealousy? Lol. I'm jealous of nothing. I'd guess that I make at least 4 times your yearly income but that's irrelevant. I'm a producer and you're a cost center. And youre comparing us to fucking Italy? Lol. 

The problem here is that you make 15 an hour while working your ass off for a guy pulling in 500 an hour and you think you're better than the guy at your office who sweeps the floors. But you arent better, and at the end of the day, if the guy who sweeps the floors cant feed his kids, he is going to take it out of your ass. 

European economics is not a step down.  Theres a reason that all of America's biggest producers support it. But I guess it's really terrible that a non producing middle manager or salesperson like yourself cant get rich in Europe.

How good a sales guy are you?  I can pay you better than Putin, but I'm not really liking what I see out of you so far.

Again, a lot of words and chest thumping while I posted research by a liberal fucking slanted source that disagrees with your communist stance. It says we are better off than Western Europe not just Italy. 

But like I said, continue being ignorant. 

[tantric superman 4667]

51 minutes ago, Incredulity said:

Regulations, such as wage and hour rules, FMLA, and labor laws are the imposition of societies conscience and morality on businesses. 

They can also be interpreted as the imposition of rules to foster efficiency in the market and society.  Any moral argument for those laws can be primarily a marketing tool.

Sure the FMLA is about helping the disabled.  But it's also about creating efficiencies so that the state doesn't have to expend even more funds helping a group that can't function at all in society.  That's an economic argument in the end.

[TwiceHorn 31263]

10 hours ago, Incredulity said:

The government already requires conscience and morality through OSHA, DOL, SEC, EPA, ..........

 

And some of those are what I would call heavy handed regulation.  And none of them really make any effort to change the dynamic of corporate governance.

[Buzzrock 14870]

To wit:

https://www.forbes.com/sites/deniselyohn/2018/01/02/2018-will-be-the-year-of-employee-experience/#463880c21c8f

Also, compensation is not necessarily the number one factor in job satisfaction. This is a few years old but interesting:

https://www.forbes.com/sites/jacobmorgan/2014/12/15/the-top-10-factors-for-on-the-job-employee-happiness/#4ce9a5185afa

[TwiceHorn 31263]

2 hours ago, Buzzrock said:

 

I wonder how often employees of public companies are not shareholders. ESPP’s seem pretty common.

But those tiny interests have no power over the board, whatsoever.  And, because they're tied to ownership, are probably likely to be voted, if at all, in favor of the "next quarterly report" and share price, rather than more long-term interests of the corporation.

[Buzzrock 14870]

11 minutes ago, TwiceHorn said:

But those tiny interests have no power over the board, whatsoever.  And, because they're tied to ownership, are probably likely to be voted, if at all, in favor of the "next quarterly report" and share price, rather than more long-term interests of the corporation.

What long term interests are you concerned with?

Long term is pretty relative, and may not even be important. Creative destruction is part of what fuels the economy. 440 of the Fortune 500 companies from 1955 no longer exist.

[Guest]

1 hour ago, Hugo Stiglitz said:

Because corporations behave like sociopaths when they are only beholden to their quarterly earnings reports/shareholders.  

If you’re into that kind of thing, knock yourself out but it’s not really in the best interests of society or improving quality of like when Gordon Gecko buys your company out.

Anyone participating in a 401k or Roth is equally sociopathic, Right?

 

What do you think drives the corporate reaction to Wall St?

Edited August 24, 2018 by slorch

[FondrenRoad 4378]

1 hour ago, this said:

Again, a lot of words and chest thumping while I posted research by a liberal fucking slanted source that disagrees with your communist stance. It says we are better off than Western Europe not just Italy. 

But like I said, continue being ignorant. 

But we arent. The average Western European has a much better quality of life. 

And, the model of corporate governance that we were discussing is specifically German, not Italian, and not all of Western Europe. German workers are happier in the workplace and more equitably compensated. 

[this 107]

1 minute ago, FondrenRoad said:

But we arent. The average Western European has a much better quality of life. 

And, the model of corporate governance that we were discussing is specifically German, not Italian, and not all of Western Europe. German workers are happier in the workplace and more equitably compensated. 

Research shows exactly opposite of what you're stating, as usual your preference to believing your preconceived notions over reading well researched facts is doing you a disservice. US has higher middle class compensation when compared to Italy, Germany and even (here it comes.....) NORWAY. Not only that, US has a larger upper middle class than those countries and a wealthy class. 

If we have a wealthier middle class, upper middle class and wealthier class than Norway much less Germany wtf are you complaining about?

[David Dennison 18652]

7 minutes ago, this said:

Research shows exactly opposite of what you're stating, as usual your preference to believing your preconceived notions over reading well researched facts is doing you a disservice. US has higher middle class compensation when compared to Italy, Germany and even (here it comes.....) NORWAY. Not only that, US has a larger upper middle class than those countries and a wealthy class. 

If we have a wealthier middle class, upper middle class and wealthier class than Norway much less Germany wtf are you complaining about?

Given its wealth, the United States fares poorly in quality of life surveys.

[this 107]

Just now, David Dennison said:

Given its wealth, the United States fares poorly in quality of life surveys.

That is exactly how this liberally slanted source measured, we were rated quite highly. 

Sorry, your opinion < Pew research. 

[David Dennison 18652]

4 minutes ago, this said:

That is exactly how this liberally slanted source measured, we were rated quite highly. 

Sorry, your opinion < Pew research. 

The Pew piece was not about quality of life. It was about middle class income.

[this 107]

3 minutes ago, David Dennison said:

The Pew piece was not about quality of life. It was about middle class income.

You cannot offer someone a better life, just tools to make it better. Money is one of those things. 

[David Dennison 18652]

Just now, this said:

You cannot offer someone a better life, just tools to make it better. Money is one of those things. 

So are government services. Those are a big reason why the United States lags in quality of life indexes. 

[this 107]

2 minutes ago, David Dennison said:

So are government services. Those are a big reason why the United States lags in quality of life indexes. 

Perceived quality of life indexes. We clearly just pay people more, even more than Norway and let them choose what THEY want as opposed to mandate what the government assumes would be a good quality of life. 

 

[David Dennison 18652]

Just now, this said:

Perceived quality of life indexes. We clearly just pay people more, even more than Norway and let them choose what THEY want as opposed to mandate what the government assumes would be a good quality of life. 

Are you under the impression that the people in those western democracies aren't choosing to live in more generous welfare states?

These are democracies we're talking about. 

[this 107]

2 minutes ago, David Dennison said:

Are you under the impression that the people in those western democracies aren't choosing to live in more generous welfare states?

These are democracies we're talking about. 

Are you talking about immigration now? Because US blows all of them out of water when it comes to the number of people that want to move here. Even from those countries. 

[David Dennison 18652]

Just now, this said:

Are you talking about immigration now? Because US blows all of them out of water when it comes to the number of people that want to move here. Even from those countries. 

I'm saying the people who live in a whole lot of western democracies believe their lives are better than Americans do. 

[this 107]

Just now, David Dennison said:

I'm saying the people who live in a whole lot of western democracies believe their lives are better than Americans do. 

People are free to believe what they want. Trumpkins believe Trump is the second coming of Buddha but it isn't necessarily accurate. Kyrie Irving believes that earth is flat, I guess it must be true for him then. 

I just gave you hard facts and figures backed with research and methodology and you come back with "they believe". 

[David Dennison 18652]

Just now, this said:

People are free to believe what they want. Trumpkins believe Trump is the second coming of Buddha but it isn't necessarily accurate. Kyrie Irving believes that earth is flat, I guess it must be true for him then. 

I just gave you hard facts and figures backed with research and methodology and you come back with "they believe". 

You're arguing just to argue. You know that the United States lags in quality of life. That's why you have to fall back on one variable, income. You have to reduce your argument to wealth because you know there are a whole host of other indicators of well being where the United States isn't doing too well.

[this 107]

8 minutes ago, David Dennison said:

You're arguing just to argue. You know that the United States lags in quality of life. That's why you have to fall back on one variable, income. You have to reduce your argument to wealth because you know there are a whole host of other indicators of well being where the United States isn't doing too well.

LOL. You keep moving goal posts. Now it isn't about income? This is how our conversation has gone on this thread since page 12 or so...

DD: People are unhappy because compared to Western Europe our middle class is struggling due to low wages.

Me: But our middle class and upper middle class is making more money and have a better lifestyle than Western Europe, see attached link.

DD: People in America believe that they have a worse quality of life

Me: They can believe what they want, does not make it true. Pew research a liberal source disagrees with your stance.

DD: You're arguing just to argue. Income is just one variable. We have it bad, and you know it! 

Me: LOL

 

Edited August 24, 2018 by this

[this 107]

Just now, David Dennison said:

Outstanding.

I know, I thought I did pretty well even with my biases towards myself. 

Thanks!

[David Dennison 18652]

3 minutes ago, this said:

LOL. You keep moving goal posts. Now it isn't about income? This is how our conversation has gone on this thread since page 12 or so...

DD: People are unhappy because compared to Western Europe our middle class is struggling due to low wages.

Me: But our middle class and upper middle class is making more money and have a better lifestyle than Western Europe, see attached link.

DD: People in America believe that they have a worse quality of life

Me: They can believe what they want, does not make it true. Pew research a liberal source disagrees with your stance.

DD: You're arguing just to argue. Income is just one variable. We have it bad, and you know it! 

Me: LOL

 

Outstanding.

[RDCanecutter 26249]

So, are we going to remake Americans into Frenchmen, or Germans?

I hope it's Frenchmen. If we go German everybody with have to show up at HOA meetings wearing tiny glasses and have a shouted argument about Don't Touch The Thermostat, The Thermostat Works Quite Properly.

I kind of like Spaniard or Italian too, but I take it those aren't options.

[FondrenRoad 4378]

1 hour ago, this said:

Research shows exactly opposite of what you're stating, as usual your preference to believing your preconceived notions over reading well researched facts is doing you a disservice. US has higher middle class compensation when compared to Italy, Germany and even (here it comes.....) NORWAY. Not only that, US has a larger upper middle class than those countries and a wealthy class. 

If we have a wealthier middle class, upper middle class and wealthier class than Norway much less Germany wtf are you complaining about?

Because we have a poorer lower class than those countries.  But sure, its fantastic that rich people are rich.  And everyone in the USA is doing awesome if we pretend that the bottom half of income earners in our country don't exist.

Edited August 24, 2018 by FondrenRoad

[Buzzrock 14870]

America is 17th in quality of life. First place goes to Canada. I'd rather live in America than Canada, but that's anecdotal:

https://www.usnews.com/news/best-countries/quality-of-life-full-list

Good news, it's not your fault if your life sucks:

https://hbr.org/2017/01/your-success-is-shaped-by-your-genes

[FondrenRoad 4378]

2 minutes ago, Buzzrock said:

America is 17th in quality of life. First place goes to Canada. I'd rather live in America than Canada, but that's anecdotal:

https://www.usnews.com/news/best-countries/quality-of-life-full-list

Good news, it's not your fault if your life sucks:

https://hbr.org/2017/01/your-success-is-shaped-by-your-genes

Canada's pretty damn awesome in the summer.

[Buzzrock 14870]

So is Chicago. Doesn't mean I want to live there.

[Hugo Stiglitz 23356]

Remarkable how many people are eager to defend the exploitive and small business crushing multi-billion dollar corporations with their overpaid CEOs. 

Almost like there’s some built in auto-defense mechanism.

Edited August 24, 2018 by Hugo Stiglitz

[this 107]

Just now, Hugo Stiglitz said:

Remarkable how many people are eager to defend the exploitive and small business crushing multi-billion dollar corporations and their overpaid CEOs. 

Almost like there’s some built in auto-defense mechanism.

No, what's remarkable is people cannot see what's in front of their eyes on a macro level researched and vetted through third party sources that are more likely to be biased towards your stance say otherwise. 

Almost as if they are in denial based on their own anecdotal failures. 

Wild.

[this 107]

12 minutes ago, FondrenRoad said:

Because we have a poorer lower class than those countries.  But sure, its fantastic that rich people are rich.  And everyone in the USA is doing awesome if we pretend that the bottom half of income earners in our country don't exist.

By bottom half, I assume you mean the bottom third. Because AGAIN, middle class is doing better. 

Glad we have at least that concession from you. Now, allow me to enlighten you on the American poor vs. European poor. 

The Poor in the US Are Richer than the Middle Class in Much of Europe

• 

530 COMMENTS

10/16/2015Ryan McMaken

In this week's debate, Bernie Sanders claimed that the United States has the highest rate of childhood poverty. CBS reports that Sanders said: "We should not be the country that has the highest rate of childhood poverty of any major country and more wealth and income inequality than any other country,"

As even CBS notes, according to UNICEF, which is probably the source of Sanders's factoid, the US has lower childhood poverty rates than Greece, Spain, Mexico, Latvia, and Israel, all of which are OECD countries or regarded as peer countries. The US rate (32.2 percent) is also more or less equal to the rate in Turkey, Romania, Lithuania, and Iceland. See page 8 of this report.

So, while Sanders probably doesn't even know what he means by "major country" it's clear that the US is not an outlier among OECD-type countries, even by UNICEF's own analysis.

We get much more insight, though, once we have a look at what UNICEF means by "poverty rate." In this case, UNICEF (and many other organizations) measure the poverty rate as a percentage of the national median household income. UNICEF uses 60% of median as the cut off. So, if you're in Portugal, and your household earns under 60% of the median income in Portugal, you are poor. If you are in the US and you earn under 60% of the US median income, then you are also poor.

The problem here, of course, is that median household incomes — and what they can buy — differs greatly between the US and Portugal. In relation to the cost of living, the median income in the US is much higher than the median income in much of Europe. So, even someone who earns under 60% of the median income in the US will, in many cases, have higher income than someone who earns the median income in, say, Portugal.

[RELATED: "If Sweden and Germany Became US States, They Would be Among the Poorest States"]

Here are all the median incomes (according to the OECD's household income comparison statistic called "median disposable income.") When adjusted for purchasing power parity, the statistic allows us to make incomes comparable across countries that use different currencies and have different costs of living. This takes into account taxes, and social benefits paid to households. So, let's use it to compare (the Y axis is in "international dollars"):

We see immediately that income is higher for US households than most of the other countries. What about that high poverty rate, though? Well, we find that the poverty level in the US is still higher than numerous countries' median income level:

The green bar is the US income at poverty levels. So, this tells us that a person at 60% of median  income in the US still has a larger income than the median household in Chile, Czech Rep., Greece, Hungary, Portugal, and several others. And the poverty income in the US is very close to matching the median income in Italy, Japan, Spain, and the UK.

Keep in mind that we're using median income here, and not GDP per capita, which means this isn't being skewed up by a small number of mega-wealthy households. So while the US may have a rather high poverty rate, we find that being poor in the US is similar to (at least in terms of income) being a median household in many other countries, including the UK and Japan.

So, yes, the US has a higher poverty rate than many other countries, but the standard of living available to a person at poverty levels in the US is higher than it is to a person at poverty levels in places like the UK, Spain, Italy, France, Japan, New Zealand, and others.  Here are all countries at the 60% of the national median:

The relationships between the countries are the same as in the first graph, but the income levels are all lower. But again, here we see that the median incomes for people at poverty levels are higher in the US than in other countries.

Thus, the fact that the US has higher poverty rates says very little about the actual living standards of the poor. The poor have higher incomes in the US in real terms in most cases. The countries that should really give us concern are the countries that have high levels of poverty and low median incomes. In this graph, we see childhood poverty levels (on y axis, according to the UNICEF report) compared with income levels for those below 60% of median (x axis, according to the OECD):

 

The countries in the top left side of graph — Greece, Mexico, Israel, Spain, Italy, Ireland, UK, and Portugal  — are the ones that have the least to offer the poor. These are countries with low median income and even lower incomes for the poor (of course). Those countries with high incomes — such as the US, Switzerland, Norway, and Australia — have much higher incomes. So while there are more poor in the US (relatively speaking) the incomes of those poor are much higher in the US, and even higher than the median income of other countries in many cases. In other words, even if the poverty rate in Greece were zero percent, all those non-poor median Greek households would be poorer than a US household at the poverty line.

Also, given that the OECD's measure here attempts to take into account income from social benefits, we can't just say "well, those European incomes may be lower, but they get more in social benefits." That is not true for these numbers. Social benefits included, Americans have higher incomes at both the median level and at the poverty level, when compared to most other countries.

This further illustrates the problem with speaking about poverty in terms of percentages of the median or as a percentage of total wealth. These comparisons are used to highlight inequality, but the fact is that the US (which has more inequality) offers higher incomes for those at poverty level. Is it better to be equal in Portugal or unequal in the US? One can be "equal" in Portugal, but it will mean a standard of living well below that which can be attained in the US at poverty levels.

Note on the OECD numbers: the median disposable-income numbers are found here at the OECD stats web site.  They are then divided by the PPP conversion factor for private consumption found here. Wikipedia has also already done this calculation and listed the values here.

 It's difficult to find median income numbers that can be compared across different countries, but for a second source, we can consult the Gallup survey data. Gallup has compiled its own data on median incomes based on self-reported household income from all sources. So, theoretically, this would include social benefits payments as well. The numbers here are higher than the OECD numbers because they do not appear to take into account the impact of taxes. So, without taxes factored in, the high-tax Scandinavian countries, for example, look wealthier in this comparison than they do in the OECD comparison. Nevertheless, there are some similarities overall:

 

In this case, the US median income is still higher than most countries in the group, but while the US ranked 4th place in the OECD survey, it ranks 6th place here. (Switzerland, oddly, is not included in the Gallup survey.)

If we reduce the US to 60% of its median level, and leave the rest alone, we find that the US, at poverty level, still comes in above or roughly equal to 15 other countries in the group. So, by this measure too, the poverty level in the US beats the median level in numerous European countries.

Photo source.

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Contact Ryan McMakenTwitter

https://mises.org/wire/poor-us-are-richer-middle-class-much-europe

[Hugo Stiglitz 23356]

Yeah okay. Russia has less wealth inequality than the United States.

Explain that one.

[wildcat09 29225]

2 minutes ago, this said:

By bottom half, I assume you mean the bottom third. Because AGAIN, middle class is doing better. 

Glad we have at least that concession from you. Now, allow me to enlighten you on the American poor vs. European poor. 

The Poor in the US Are Richer than the Middle Class in Much of Europe

• 

530 COMMENTS

10/16/2015Ryan McMaken

In this week's debate, Bernie Sanders claimed that the United States has the highest rate of childhood poverty. CBS reports that Sanders said: "We should not be the country that has the highest rate of childhood poverty of any major country and more wealth and income inequality than any other country,"

As even CBS notes, according to UNICEF, which is probably the source of Sanders's factoid, the US has lower childhood poverty rates than Greece, Spain, Mexico, Latvia, and Israel, all of which are OECD countries or regarded as peer countries. The US rate (32.2 percent) is also more or less equal to the rate in Turkey, Romania, Lithuania, and Iceland. See page 8 of this report.

So, while Sanders probably doesn't even know what he means by "major country" it's clear that the US is not an outlier among OECD-type countries, even by UNICEF's own analysis.

We get much more insight, though, once we have a look at what UNICEF means by "poverty rate." In this case, UNICEF (and many other organizations) measure the poverty rate as a percentage of the national median household income. UNICEF uses 60% of median as the cut off. So, if you're in Portugal, and your household earns under 60% of the median income in Portugal, you are poor. If you are in the US and you earn under 60% of the US median income, then you are also poor.

The problem here, of course, is that median household incomes — and what they can buy — differs greatly between the US and Portugal. In relation to the cost of living, the median income in the US is much higher than the median income in much of Europe. So, even someone who earns under 60% of the median income in the US will, in many cases, have higher income than someone who earns the median income in, say, Portugal.

[RELATED: "If Sweden and Germany Became US States, They Would be Among the Poorest States"]

Here are all the median incomes (according to the OECD's household income comparison statistic called "median disposable income.") When adjusted for purchasing power parity, the statistic allows us to make incomes comparable across countries that use different currencies and have different costs of living. This takes into account taxes, and social benefits paid to households. So, let's use it to compare (the Y axis is in "international dollars"):

We see immediately that income is higher for US households than most of the other countries. What about that high poverty rate, though? Well, we find that the poverty level in the US is still higher than numerous countries' median income level:

The green bar is the US income at poverty levels. So, this tells us that a person at 60% of median  income in the US still has a larger income than the median household in Chile, Czech Rep., Greece, Hungary, Portugal, and several others. And the poverty income in the US is very close to matching the median income in Italy, Japan, Spain, and the UK.

Keep in mind that we're using median income here, and not GDP per capita, which means this isn't being skewed up by a small number of mega-wealthy households. So while the US may have a rather high poverty rate, we find that being poor in the US is similar to (at least in terms of income) being a median household in many other countries, including the UK and Japan.

So, yes, the US has a higher poverty rate than many other countries, but the standard of living available to a person at poverty levels in the US is higher than it is to a person at poverty levels in places like the UK, Spain, Italy, France, Japan, New Zealand, and others.  Here are all countries at the 60% of the national median:

The relationships between the countries are the same as in the first graph, but the income levels are all lower. But again, here we see that the median incomes for people at poverty levels are higher in the US than in other countries.

Thus, the fact that the US has higher poverty rates says very little about the actual living standards of the poor. The poor have higher incomes in the US in real terms in most cases. The countries that should really give us concern are the countries that have high levels of poverty and low median incomes. In this graph, we see childhood poverty levels (on y axis, according to the UNICEF report) compared with income levels for those below 60% of median (x axis, according to the OECD):

 

The countries in the top left side of graph — Greece, Mexico, Israel, Spain, Italy, Ireland, UK, and Portugal  — are the ones that have the least to offer the poor. These are countries with low median income and even lower incomes for the poor (of course). Those countries with high incomes — such as the US, Switzerland, Norway, and Australia — have much higher incomes. So while there are more poor in the US (relatively speaking) the incomes of those poor are much higher in the US, and even higher than the median income of other countries in many cases. In other words, even if the poverty rate in Greece were zero percent, all those non-poor median Greek households would be poorer than a US household at the poverty line.

Also, given that the OECD's measure here attempts to take into account income from social benefits, we can't just say "well, those European incomes may be lower, but they get more in social benefits." That is not true for these numbers. Social benefits included, Americans have higher incomes at both the median level and at the poverty level, when compared to most other countries.

This further illustrates the problem with speaking about poverty in terms of percentages of the median or as a percentage of total wealth. These comparisons are used to highlight inequality, but the fact is that the US (which has more inequality) offers higher incomes for those at poverty level. Is it better to be equal in Portugal or unequal in the US? One can be "equal" in Portugal, but it will mean a standard of living well below that which can be attained in the US at poverty levels.

Note on the OECD numbers: the median disposable-income numbers are found here at the OECD stats web site.  They are then divided by the PPP conversion factor for private consumption found here. Wikipedia has also already done this calculation and listed the values here.

 It's difficult to find median income numbers that can be compared across different countries, but for a second source, we can consult the Gallup survey data. Gallup has compiled its own data on median incomes based on self-reported household income from all sources. So, theoretically, this would include social benefits payments as well. The numbers here are higher than the OECD numbers because they do not appear to take into account the impact of taxes. So, without taxes factored in, the high-tax Scandinavian countries, for example, look wealthier in this comparison than they do in the OECD comparison. Nevertheless, there are some similarities overall:

 

In this case, the US median income is still higher than most countries in the group, but while the US ranked 4th place in the OECD survey, it ranks 6th place here. (Switzerland, oddly, is not included in the Gallup survey.)

If we reduce the US to 60% of its median level, and leave the rest alone, we find that the US, at poverty level, still comes in above or roughly equal to 15 other countries in the group. So, by this measure too, the poverty level in the US beats the median level in numerous European countries.

Photo source.

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Contact Ryan McMakenTwitter

https://mises.org/wire/poor-us-are-richer-middle-class-much-europe

Now compare the relative debt burdens.

[this 107]

2 minutes ago, Hugo Stiglitz said:

Yeah okay. Russia has less wealth inequality than the United States.

Explain that one.

Why does it matter? When everyone is wealthier than rest of the world? 

Other than, you just want the other guy to have less because you just dont like his fancy car or house godddamnit! 

[this 107]

2 minutes ago, wildcat09 said:

Now compare the relative debt burdens.

You do that and get back to me if we have it worse. K? K!

[GSU&UT 1798]

Holy shit at citing the Mises institute. Just full deep throating libertarianism