The Ugly

At the risk of being a pedant, allow me to respond in full length to a blurb in David’s center-column post News: The Good, the Bad, and the Ugly. I do not fault David for citing the BBC; nor do I blame the Beeb for citing UNICEF. The way that UNICEF presented its data, however, is an irresponsible, value-laden way of sticking its worldly fingers in America’s eye.

Let me explain. First of all, UNICEF's own public relations people wrote a downright misleading piece. The first sentence says "The proportion of children living in poverty, or on less than $1 per day, has risen in most of the world's developed countries since the early 1990's". Wow. That's a serious allegation. Then, a few paragraphs later, they write,

At the top of the child poverty league are Denmark and Finland with child poverty rates of less than 3 per cent...At the bottom are the United States and Mexico, with child poverty rates of more than 20 per cent.

No mention of a poverty measurement has been made other than the dollar-a-day figure at the top. Then, after a quote about how wonderful government spending is, comes the qualifier:

The figures refer to relative poverty, which is defined as having an income below 50 per cent of the national median. What they show is that 40 to 50 million children living in some of the world's wealthiest countries, are growing up in poverty.

Aha! Twenty-two percent of American kids are not growing up on $1 a day. No, they are growing up in families which earn less than 50% of the median income. That "poverty" line is $21,763 per family. Of course, if you measured each state separately, their "poverty" lines would stretch from $27,610 in New Jersey to $15,605 in West Virginia, a discrepancy of almost 80%. With a population and physical area comparable to all the European OECD members together, a comparison that includes the whole of the U.S. is simply unfair. If OECD Europe were considered as a whole, almost the entire nations of Greece, Hungary, and Poland would be considered impoverished, and their perceived advantage over us would disappear.

Stepping back even further, I would call the percent-of-median-income-method into question altogether. Take for example Maryland and West Virginia. While I don't have hard data on either, anyone who has driven through the two states would agree that West Virginia has a higher proportion of people they would describe as poor. Maryland, however, contains both large wealthy communities and large working-class ones. Thus, according to the method used by UNICEF, Maryland has higher poverty than West Virginia. In fact, a family in Sharpsburg, MD, earning $27,000 per year would be considered poor, while a family earning $16,000 across the river in Shepardstown, WV, would be considered non-poor.

This is ridiculous. Yet this is precisely how Europe is treated in the OECD survey. Hungary, which has a cost-of-living-adjusted per-capita income about one-third the size of America's, is considered by UNICEF to have 9% child poverty while the U.S. has 22%. Ridiculous. Likewise North Korea, where virtually everyone is poor and many are starving, would have very low poverty by this measure. Ridiculous.

Why is UNICEF publishing these irresponsible numbers? Any economist can tell you at a glance that these numbers are a measure not of poverty but of income inequality. The UNICEF press release uses the semi-deceptive term "relative poverty" once; but uses the word "poverty" 18 times. Poverty is a separate concept from relative poverty or income inequality; UNICEF confuses these two radically. The relative poverty numbers are a dumbed-down version of the Gini Coefficient, which is the measure economists use amongst themselves to measure income inequality, using the same basic methods, but measuring the degree of inequality at the top as well as the bottom.

The only conclusion I can draw is that UNICEF is pushing a socialist agenda. If what they really cared about was the number of children whose basic needs are unmet, they would have published the numbers they alluded to in that first sentence. Remember? "The proportion of children living in poverty, or on less than $1 per day, has risen in most of the world's developed countries since the early 1990's". That's serious. That should be addressed. I believe that we as a society should meet the needs of our weakest members. UNICEF, however, seems to be more interested in finding a statistical club with which to bash the U.S., while covering up the widespread poverty on "their own" continent.

U.S. data source: http://www.census.gov/hhes/www/income03.html

Posted by Chops at March 4, 2005 10:17 AM