We\’ll let Ritchie off this error

Because it\’s the Financial Times that has fucked up here.

Well, we\’ll slightly let Ritchie off because as an anti-poverty campaigner he should know these things and not swallow what he reads in the papers.

Poverty among the working-age population of the US rose to the highest level for almost 50 years in 2009, as the human cost of the deepest economic downturn since the Great Depression was laid bare in new census data.

Well, no. I\’d certainly expect poverty to have increased (however you want to define it) during the recession but those Census figures don\’t in fact show that it has.

The Census Bureau said that 43.6m people were living below the poverty line in 2009, the highest number in 51 years of data,

Well, no, the Census didn\’t say that actually.

The Census Bureau uses an absolute measure of poverty that compares a household’s income to the cost of a basket of goods such as food and clothing. A family of two adults and two children is defined as poor if its income is less than $21,756.

That definition is often criticised because it does not reflect the cost of goods with higher than average inflation, such as education, healthcare and housing.

No, the measure is often criticised for a very different reason.

US poverty figures measure those who would be in poverty if it were not for the help that those in poverty receive in order to reduce their poverty. This is entirely unlike the way that every other country measures poverty and it creates a really rather large problem.

Now, we in the UK, in common with just about everyone else, measure poverty after the impact of all of the things that we do to try and reduce poverty. It is after tax and after benefits income that we measure.

The Americans don\’t do this. The poverty line is market income plus direct cash transfers. It does not include any aid to those who would be poor that comes either in kind or through the tax system.

So it does not include Section 8 housing vouchers (their equivalent to our housing benefit) it does not include Medicaid (health care for the poor) and it does not include the largest anti-poverty program they have, the EITC (our tax credits).

So what changes in the numbers under the poverty line show is the number who need help by their definition: it does not give us any information at all on those who are not poor after they\’ve received the help that is on offer.

Yes, there is another difference, the US poverty line is an absolute measurement, a real standard of living upgraded for inflation, rather than a relative measure like our own, linked to median incomes.

But it really is true that the US numbers give us no information at all on how many people are \”living in poverty\”. They tell us only how many would be if there were not a welfare system. And yes, the US does have a welfare system. The EITC alone is estimated to lift 5 million households above the poverty line.

Think of it this way. Anyone care to try measuring the UK poverty level if we don\’t include HB and tax credits?

Where would, for example, Labour\’s much vaunted reduction in poverty rates be then, eh?

As I\’ve said before, with specific reference to Ritchie. If you want to use economic statistics to make your point you\’d better understand the economic statistics you\’re using.

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