One Sign America Is Not in Decline

How bad is U.S. poverty, globally-speaking?

By SHARE

You should definitely check out my colleague Rick Newman's 9 Signs of America in Decline. He combines together some different thought-provoking data that make up for a very worrisome whole. But I do have one comment to make on one of his signs that might make the overall picture not look as bad.

Poverty. The U.S. poverty rate, about 17 percent, is third worst among the advanced nations tracked by the Organization for Economic Cooperation and Development. In that sample, only Turkey and Mexico are worse.

That's completely true. But there's "poverty" and then there's what we normally think of when we think about being poor and its impact on quality of life. The fact that there are more people living "in poverty" in the United States than in most advanced nations does not mean that the U.S. has more poor people than most of those countries.

Poverty is a relative concept. Specifically, the OECD defines it as less than one half of the nation's median household income. Because that income is so high in the U.S., people who would be rich if they lived in Turkey or Mexico could be considered impoverished in America.

When we look at standard of living on an absolute basis, the U.S. fares much better.

The OECD's data on national income per capita (adjusted for purchasing power parity) places the U.S. at third-highest in the world, behind only Luxembourg and Norway, and ahead of Switzerland. The U.S. has consistently maintained this ranking over several years.

But the OECD's numbers come from 2007. The recession, of course, is going to make the U.S. poorer in an absolute sense. But will it lose that high ranking compared to the rest of the world?

It seems unlikely.  The IMF's projection of GDP per capita PPP in 2010 has the U.S. as the fifth-highest in the world, after only Qatar, Luxembourg, Norway and Brunei, and ahead of Singapore, Hong Kong and Switzerland.