"America's Poor are Rich"

Paul Henry Rosenberg rad at gte.net
Wed Feb 3 10:38:17 PST 1999

Doug Henwood wrote:

> Margaret wrote:
> >http://www.abcnews.go.com/sections/business/DailyNews/cox990202.html
> >
> >The idiot will be online at 1pm Eastern-US time on
> >Thursday. Sounds like a wonderful chance to pin a
> >tail on a donkey.
> Ah, Michael Cox. He and his sidekick, Richard Alm, have been pumping out
> apologies for the U.S. income distribution for the Federal Reserve Bank of
> Dallas for years now. They're the authors of one of the most devious pieces
> of economic "research" I've ever seen - the Dallas Fed's 1995 annual report
> essay on upward mobility. Cox & Alm have a new book out, and this is part
> of the publicity campaign. I'm going to record an interview with Cox in
> about 10 days for later radio broadcast; it's going to be fun to give him a
> hard time.

If America's poor are rich, then the poor in Western Europe (almost all of it, anyways) are kings.

This is from "Luxembourg Income Study Working Paper No. 188: Do Social-Welfare Policies Reduce Poverty? A Cross-National Assessment" by Lane Kenworthy, accessible in PDF format from the online list of Luxembourg Income Study Working Papers at http://lissy.ceps.lu/wpapersentire.htm.

NOTE: These are ALL comparisons to US.

TABLE 1: Post-Tax/Transfer Absolute Poverty Rates (%), circa 1991 a ¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾

Percent of the U.S. post-tax/transfer

median at which the poverty line is set


Year 50% 40% 30% ¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾ Australia 1989 20.1 11.9 5.6 Belgium 1992 14.2 6.0 2.2 Canada 1991 11.3 6.5 3.1 Denmark 1992 13.5 5.9 3.4 Finland 1991 8.1 3.7 1.4 France 1989 19.7 9.8 4.8 Germany 1989 11.5 4.3 2.1 Ireland 1987 43.7 29.4 15.6 Italy 1991 26.1 14.3 5.6 Nether. 1991 16.0 7.3 4.2 Norway 1991 4.0 1.7 0.7 Sweden 1992 11.0 5.8 3.1 Switz. 1982 6.2 3.8 2.7 UK 1991 27.0 16.8 6.1 US 1991 17.7 11.7 6.6 ¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾ Note. Data are author’s calculations from the LIS database. a Percentage of individuals in households with post-tax/transfer incomes (adjusted for household size) below poverty line in 1991 U.S. dollars. For method of calculation, see text.

The author writes:

"These absolute poverty rates are shown in Table 1. Despite the fact that it is the richest nation and has the highest median income, the United States does not have a low rate of absolute poverty. Instead, it has one of the highest, exceeded only by those of Italy and three other 'Anglo' countries: Ireland, Australia, and the United Kingdom. The lowest rates are found in Norway, Finland, Switzerland, and Germany, with Sweden, Denmark, Belgium, and Canada not far behind. The rate for any given country varies considerably depending upon the particular income level selected as the poverty line (50% or 40% or 30% of the U.S. median), but the differences across countries vary only minimally: the three measures correlate between .85 and .96 with one another."

-- Paul Rosenberg Reason and Democracy rad at gte.net

"Let's put the information BACK into the information age!"

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