Child Poverty
U.S. Senator Bernie Sanders (I–VT) claims that the USA ranks “34th in the world in childhood poverty.”
IN FACT, Sanders’ statistic misconstrues a UN report, the report itself is fatally flawed, and the U.S. has one of the lowest childhood poverty rates in the world. Here are the specifics:
- The source of Sanders’ assertion is a 2012 report from UNICEF which found that the U.S. had the second-highest “relative child poverty” rate among 35 of “the world’s wealthiest nations” — not “34th in the world” as Sanders alleges.
- The report warns that “this relative poverty measure may mislead the public,” and therefore, people who cite it should “strictly” use “the term ‘relative child poverty’” — which Sanders does not.
- “Relative poverty,” as defined by the report, is “living in a household in which disposable income, when adjusted for family size and composition, is less than 50% of the national median income.”
- The report stresses that “relative poverty” can “mean very different living standards in different countries” because “50% of median income in Norway” is 10 times greater than in Bulgaria.
- The report also cautions that “comparing relative child poverty rates on the basis of household incomes cannot take into account significant differences between countries in the cost of living and especially in the costs of essential goods and services such as health and child care.”
- For the reasons above and more, the World Bank’s “preferred” indicator of material well-being is “personal consumption,” a comprehensive measure of the goods and services consumed by households.
- In 2012, a chief economist at the U.S. Bureau of Economic Analysis conducted a study which found that the poorest 20% of U.S. households consumed an average of $57,049 of goods and services in 2010, or 5 times the cash income they reported to the Census Bureau that year.
- The 400% difference between the reported income and consumption of the “poor” in the U.S. is because they heavily underreport their cash income and receive a host of non-cash goods and services from governments and charities, such as Food Stamps, Medicaid, Section 8 housing, Head Start, utility assistance, college grants, school lunch, school breakfast, community health centers, family planning services, prescription drugs, job training, clothing, legal services, cell phones, cell phone service, and internet service.
- In contrast, most U.S. households earn those goods and services for themselves while also paying taxes that fund these benefits for others. As a result, U.S. middle-income households consume only 26% more goods and services than the poorest 20%.
- Accounting for all goods and services, the poorest 20% of Americans consumed more in 2010 than the national averages for all people in most affluent countries. The “poor” in the U.S. also consumed 3–30 times more than the national averages for all people in a wide array of developing nations.
- In 2021, the United States had the highest average consumption per person of all developed nations.
- Unlike the relative poverty measure in the UN report, the absolute measures above are adjusted for purchasing power parities so that goods and services like apples, cell phones, MRIs, and square feet of living area are counted the same in all of the nations.
- The UN report alleges that “absolute” poverty is really a “relative” measure because standards of living have changed over time, but the fact is that absolute measures are absolute across nations, which is what the authors of the UN report and Sanders compare.
- Instead of stating the facts of this matter, Sanders & Co. have repeatedly and falsely denigrated the U.S. in comparison to other nations where their middle classes are poorer than the poorest 20% of Americans.
