U.S. Child Poverty
U.S. Senator Bernie Sanders (I–VT) claims that the “United States has the highest rate of childhood poverty of almost any major country.”
IN FACT, the U.S. has one of the lowest rates of child poverty of all countries, including small wealthy ones like Denmark and Iceland. 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 “almost any major country.”
- More importantly, the report warns that “this relative poverty measure may mislead the public” and that all references to 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 others, the World Bank’s “preferred” indicator of material well-being isn’t income but “personal consumption,” a comprehensive measure of the goods and services consumed by households.
- Likewise, the Journal of Human Resources states that “consumption is better measured than income for those with few resources” and is “a more direct measure of material well-being” than income.
- Furthermore, the Journal of Human Resources explains that “consumption standards were behind the original setting of the poverty line,” but governments now use income because of its “ease of reporting.”
- The Bureau of Economic Analysis, which is the primary source for U.S. consumption data, normally reports consumption for the nation as a whole and doesn’t break down the data by economic levels. However, a chief economist at the Bureau of Economic Analysis conducted a study in 2012 which provided that data for 2010.
- The study found that the poorest 20% of U.S. households consumed an average of $57,049 of goods and services, or 5.2 times the $11,034 of income they reported to the Census Bureau.
- That massive differential between their reported income and consumption is because the “poor” in the U.S. 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.
- Using international purchasing power parities so that goods and services like apples, shoes, cell phones, MRIs, and square feet of living area are counted the same in all nations, the poorest 20% of people in the USA consumed more goods and services than the averages for all people in most of the world’s richest nations, such as Spain, Denmark, Iceland, Japan, Greece, and New Zealand.
- Furthermore, the poorest 20% of people living in the United States, which includes millions of illegal immigrants, consumed an average of 3–30 times more than the national averages for all people in a wide range of developing countries.
- None of this means that America’s poor “live better” than average people in the nations they outpace, because people’s quality of life also depends on their communities and personal choices, like the state and local politicians they elect, the crimes they commit, and the spending decisions they make.
