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Lies, damn lies and statistics David Goldstone has discovered that ‘voodoo economics’ is alive and well and living in Broadcasting House in Portland Place, London
Yesterday I discovered that:
The UK has the second highest rate of poverty in the European Union, with 22% in poverty compared to the EU average of 15%. Only Greece is higher. The Scandinavian countries and the Netherlands, with their highly-developed welfare states, have the lowest poverty rates.
Even worse…
The number of people living below the poverty line… is twice as high as it was 20 years ago.
How can this be? Have real incomes not risen in the last 20 years? Has trickle-down failed? Is capitalism not producing more capital? Should I take up socialism?
Well, it turns out that “poverty” BBC-style means anybody with an income below 60% of the median, regardless of the fact the purchasing power of that median has been almost constantly rising. How does the fact some people get richer (in fact most people over the last 20 years) actually make other people somehow poorer?
David Goldstone
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“Below 60% of the median”? The BBC thinks someone making the median income is impoverished?
I found out in the early 1980’s that my family was in poverty when I was growing up. A divorced mother raised myself and an older sister and made a living by renting out the upstairs to roomers. [It was a rather large old american house in a small town… we got a lot of USAF guys, ATC’s, pilots, stewardesses… anybody wonder why I’m into aviation?]
I’d say she did a rather good job of it. We never felt we wanted for anything, even if we were below what was later defined as the poverty line for that time.
If I’d only known! I was a…a … VICTIM!!!! Yeah, that’s the ticket. I lost my birthright! My heritage! I grew up self-reliant and confident instead of knowing it WAS ALL SOMEONE ELSES FAULT. And that I SHOULD HAVE BEEN TAKEN CARE OF!
These arses just make me sick. Not having a lot of money doesn’t make you poor. Having stupid and uncaring parents makes you poor. All the money in the world can’t cure that.
Hmm. But wait, isn’t the UK supposed to be part of the EU? So shouldn’t the BBC look at what percentage of people are below 60% of the EU median? Maybe that’s reserved for if you join the euro?
Look, by further integrating with the EU millions of Brits really will escape poverty, at least according to the (quite silly) BBC!
It’s the politics of envy. The idiotarian cult of equality above liberty (or reality).
Hello and thanks for the TrackBack-Ping.
I hear often that there is absolute and relative poverty. Absolute povery means that someone has not enough to eat, no home and clothing. Because there is not enough absolute poverty in Europe, people were inventing “relative poverty” this means you are poor if you have less than 50% (in Germany, I don’t know why it is 60% in UK) of the average income.
If Bill Gates would move to a country, all citizens would become poor in the country and richer in the United States. If income (an productivity) of everyone would be twice as high, no one would become less poor.
Very interesting. This reminds me of intelligence testing. The people who run intelligence tests seem hellbent on making it look like intelligence is an inborn, unchangible thing. So 100 IQ is always defined as the mean IQ, even though people are answering more questions correctly on average, they’re just as “smart” as people were 20 year ago.
By the definition the BBC is using for poverty, all this says is that the poor are getting richer at a slower rate than the rich. If they’re still getting richer, what’s the problem?
I live in a suburb of Houston, Texas where the median income is $75,827. There are no doubt some residents here living below 60% of that figure ($45496). Now, imagine a poor but egalitarian community across town where everyone earns exactly $30,000, based upon the BBC’s metric there would apparently be “more poverty” here than there. Without any mention of the actual median incomes of the countries in question the claims this article makes are beyond meaningless. If I were cynical I would say those figures were purposefully omitted to further a socialist agenda – if I were cynical :-P.
This isn’t the BBC’s definition but the government’s definition.
John Thacker — I don’t understand your point given the EU median income is almost certainly as high as the UK median income.
More generally, obviously no-one here has ever heard of relatively povery measures. Although obviously they don’t tell the whole story, it is not difficutl to see that they have a place because otherwise it would be easy to prove there as no poverty in this country.
E.g in 1945 an member of parliament had an (inf adjusted) income in today’s terms of £14,000. If we only use absolute poverty measures, and said in 1945 that anyone earning a quarter of an MPs salary then was ‘poor’, e..g £3,250, then hardly anyone is ‘poor’ today. I don’t think this is true.
CIA World Factbook
The EU has a bunch of nations whose GDP per capita is close to the UK’s (although the UK’s is embarassingly lower than most of those), and a handful whose median is quite lower. I hadn’t realized how much the UK had slipped compared to the last time I learned the figures, so the proposition does appear to be probably false. I apologize.
Still, it’s clear that millions are plunged into poverty in Spain, Portugal, and Greece merely by them joining the EU. If the Eastern European countries join the EU, that will presumably through the magic of silly statistics lift millions of Britons out of poverty.
GDP per capita (PPP), EU nations-
UK $24,700
France $25,400
Germany $26,200
Spain $18,900
Portugal $17,300
Greece $17,900
Austria $27,000
Ireland $27,300
Belgium $26,100
Denmark $28,000
Finland $25,800
Italy $24,300
Luxembourg $43,400
Netherlands $25,800
Sweden $24,700
Other examples
USA $36,300
Poland $8,800
Czech Rep $14,400
Hungary $12,000
John Thacker: Remember that GDP per capita and median income are two very different things, because per capita GDP is a mean, whilst median income is a median, and GDP and income measure different things.
Surely John Thacker’s point remains a good one?Although GDP per capita and median income (obviously) measure different things, they are closely correlated. So when Poland et al join the EU, the median income in the EU will fall substantially. The percentage of people in the UK below 60% of the EU median will therefore also fall. Net result: fewer people in the UK will be in “poverty” even though none of them are a jot richer.
Mean incomes and mean GDP are very closely correlated, but the median income and mean GDP are not. One person making $10M can cancel a lot of people making $10000, but in the median income (s)he only counts as one slot to fill. I imagine that this would strengthen Thacker’s point since the median income will generally be lower than the mean income. However, when commenting on a post titled “Lies, damn lies and statistics”, it makes sense to keep our statistical wits about us.
60% of median is used rather than 50% of mean as before because in typical income distributions the numbers are about the same but median is less sensitive to outliers.
The CIA World Factbook numbers are usually rubbish. They attempt to adjust the figures with a Purchasing Power Parity calculation but it rarely reflects reality. The true cost of a basket of goods and services in the UK is cheaper than in Germany and France because what is important is not GDP per capita, even PPP adjusted, but residual income. Holland is certainly poorer than Britain by this criterion, as my brother will aver, having moved back to the UK after 27 years in Amsterdam. He might be making marginally less in the UK, but the transition from an effective tax rate of 60% to one of 40% makes a big difference.
The whole notion of relative poverty is gibberish. It is specifically intended to ensure that ‘poverty’ never disappears, as part of the pressure for socialist redistributive taxation.