The myth of American poverty

The myth of American poverty, by Tim Worstall.

… there is no poverty in America. There is most certainly inequality, but not a whit or a scrap of poverty. Nor is it true that those at the bottom of that inequality heap live notably worse lives than those at the bottom of our own more caring and sharing societies.


The main example given by the Mail is Otibehia Allen, a single mother of five. Yes, we would expect there to be the occasional economic problem with that familial set up. We’re told she works two jobs but note that total hours per week are around 30 at some tiny scrap above minimum wage. Yes, things are going to be tight but this is not, I insist, poverty.

As a rough finger count her income from employment will be $12,000 a year. That’s certainly below the US poverty line for that household. But let’s compare that income with global ones (and yes, we’re adjusting for different prices in different places, PPP). That puts her in the top 15 per cent of all global incomes as an individual. …

When we correct for [all of the things we do to alleviate poverty, after tax credits, child benefit, housing costs and so on] Ms. Allen’s familial income will roughly double, to perhaps $24,000 a year. No, I wouldn’t and you wouldn’t want to raise 5 kids on that. But it is also in the top 3 per cent of all global individual incomes. …

Even if we split that among household members, $4,000 each, that’s in the top 27 per cent. And to repeat, yes, we’re correcting for the fact that lentils are 2 cents a tonne in India, $1 a pound in Walmart.


The truth here is that in the rich world we just do not have poverty as it is globally or historically understood and we haven’t for over half a century.

Certainly, addiction or mental health issues can lead to a falling through the cracks but absent either or both of those there just isn’t anyone at all living on what would be considered an entirely normal lifestyle back in 1900.

hat-tip Matthew