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Trivia Tidbit Of The Day: Part 382 -- European Definitions Of Poverty.

But.. There's Inequality In America-

This is funny.

The EU explains that "being poor is relative" (.pdf).

Okay, reasonable. In the United States, our poor would be among the wealthiest people in many other countries. The wealthiest people in some countries might be considered poor or barely middle class in the United States.

Here is how Eurostat defines "poverty risk" these days (.pdf):

...living in households with an “equivalised disposable income” below 60% of the median equivalised income of the country they live in. This means that around 72 million citizens are considered as at risk of poverty in the EU25.

But here's the thing. The EU25 includes some very poor countries, and some very poor regions within countries. That figure of 72 million could easily be far, far more, if "poor" is not a "relative" concept. Actual poverty-- or risk of poverty-- is not that important under the Eurostat definition. Disparity (or inequality) is all that matters.

Here is their chart (.pdf):

So, instead of measuring actual poverty, the EU is measuring how far some of its citizens are from the local median incomes.

Got that?

As long as the dreaded "inequality" is not apparent, it's totally okay to have a lot of poor people. If everyone is poor, but there's no inequality, well, in European terms, you've got yourself a winning economy. On the other hand, although (actually, because) a country like the United Kingdom is significantly more successful economically than the EU average, the UK is said to have a higher proportion of people at risk for poverty than a much poorer country like Hungary.

If you earn a few thousand Euro per year in Hungary, you're fine. If you earn several times that in the UK, you are at risk for poverty. With our standardized poverty thresholds in the United States, we don't have the luxury to manipulate our poverty statistics that way. Can you imagine if we tried to do what EU does with its poverty numbers, region by region, state by state, or county by county? Oh, how our poverty rate would plummet. And overnight!

John Rosenthal adds:

...according to the EU's own comparative income data (2001 "Laeken indicators"), the median income in Portugal for a single adult is roughly €8,000 per year and for a family of four, just under €17,000. This implies that roughly half of the Portuguese population lives below the monetary threshold of poverty as defined by the US Department of Health and Human Services.

This is the same Portugal whose socialist leader-- and buddy of Howard Dean-- recently declared:

"Europe needs an America that is back on track," said Portuguese Socialist Prime Minister Jose Socrates, whose country is hosting the meeting.

"We need, today more than ever, to reinforce and renew the strategic alliance between the United States and Europe," Socrates said. "We know that a stronger Democratic Party is key for this to happen."

Got that?

Europe.

Needs America.

To get back on track.

Ha.

And yet, U.S. Democrats want to Eurocize the American economy, all while closing down trade. Whether or not we effectively resist these "populist" impulses will determine America's fate, economically, culturally, militarily, and otherwise, for many years to come.

Previous Trivia Tidbit: Inequality.

Posted by Will Franklin · 10 December 2006 11:55 PM

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