If you define poverty as income related to costs of living and obtaining necessities for living, it should be entirely decoupled from income inequality. If the poorest 20% of americans had their incomes triple over night without a corresponding increase of the costs of living and Bezos becomes a trillionare, poverty would have decrease with income inequality worsening. If the richest Americans all saw 75% of their wealth and income evaporate overnight while the poorest 50% americans lost 10% wealth and income, income inequality would reduce but poverty would still increase.
You might say that income inequality contributes to disparities in political influence which may cause more longterm poverty, but that link has far too many steps in it (political corruption for example) to say the two are now directly linked
I think that definition is susceptible to defining the "necessities for living" in ways that underestimate poverty. How do you define what's the standard of living? As of 2021 I'd imagine that several necessities for interacting with society such as internet access and potentially even mobile access would not be universally viewed as required to be above the poverty line. Similarly while home ownership is probably not required to be above poverty line, is stable access to housing required? What about having sufficient savings to survive/social support to survive the loss of a paycheck without missing rent?
At least where I live in Maryland, being on "welfare" includes a cheap smart phone because a lot of jobs assume you have one for things like driving directions, getting signatures, taking pictures of receipts, etc.
If someone falls below the point where they can afford the requirements for typical jobs, then they may enter into a spiral where there is no path out of poverty.
There was a great moment of irony in my early career where lacking a job post-college ('08 reccession) I was unable to pay my student loans. 6 months after graduating I received an offer from Sallie Mae to work as an engineer, however due to corporate policy a sallie mae will not employ anyone who is arrears on their student debt.
At this point, owing approximately $2000 and only had $250 to my name which was required for rent, food, and the 18 year old ford escort that I needed to drive to work.
I was able to arrange the money, but ultimately I was within a day of being put out of work for lack of ability to pay a debt. Had this occurred I likely would not have been able to work in software, and in all likelihood the bank may never have gotten their money back on the student loans.
Either mobile data access or internet access should be, yes. You need one of those to access the job market today (among other critical services). Smartphones have become so cheap that they are most people (especially those in lower socioeconomic brackets) only computing device, and having a phone number is also a prerequisite for society, so mobile data access is the common way to gain internet access for a large swathe of society.
This is a global phenomenon too (and even more so in other countries).
I think it makes sense for them to be decoupled on some level, but maybe not totally.
The danger on one side is falling into a sort of hedonic treadmill issue where the poverty level defines a standard of living that is so generous that it ceases to be a measurement of hardship. The danger on the other side is fixing the poverty level at some static level that doesn't take into consideration inflation and other changes to the environment that people actually live their lives in.
Exactly. Some people seem to refer to poverty as living with the standards of 2000 years ago. Of course we improved. That doesn't mean that relative poverty is getting worse and that other factors like free time have worsened if compared with centuries ago.
>other factors like free time have worsened if compared with centuries ago.
This might be true if you consider being holed up with your family for the entirety of winter as "free time." Also, these studies always neglect the amount of random work that needed to be done before technology (e.g. fetching water from a well, chopping firewood, weaving baskets, etc).
Even ignoring time spent doing non-work things we don't do, free time has increased a lot over a century. We have good data on this. Factory shifts circa 1900 were long, and 2-day weekends rare.
Unless "centuries ago" means several centuries, in which case maybe it's murkier, the pre-industrial world was different. IIRC hours worked increased in the pre-industrial build-up to the revolution -- perhaps because there was more to buy, and people adjusted to try to buy things, rather than stopping when they had enough to eat.
idk man poverty in the us is not as bad as in india but it sure is worse than east europe. there is a dude here stating inequality is not bad, perhaps they’d want to visit communist countries to see how wide the gap is between regular folks and the elite
Have you ever visited a gypsy village in eastern Slovakia or in the Balkans? You know, the huts that barely stand? Or some of the most notorious housing projects?
That is a trip straight to the Middle Ages. Look at the following videos.
Those are gypsy and you can find the same exact type of camps/villages in Western Europe, no need to go to Eastern Europe.
Their condition doesn't really depend on the poverty level of the country they live in, but other factors such as cultural and integration issues, not always caused by them.
I am a Czech, I know gypsies well, I had several classmates from all sorts of gypsy families - from very well integrated to the ghetto standard.
I would argue that multigenerational poverty in contemporary West has always something to do with cultural and integration issues. Plenty of refugees who came with a small bags of personal items have built middle class lives in a generation, even though they were foreign, did not know the language and faced crude racism from primitives.
It is possible for the people at the bottom to have better housing, better food, better education, and better health, while the people at the top still enjoy a vastly disproportionately greater increase in income and wealth.
With disproportionate gains and different spending priorities, you won't see consistent inflation across all kinds of goods. Because the inflation is concentrated at the top, the people at the bottom won't get priced out of the things they need. They're not getting priced out of anything they couldn't have afforded 20 years ago.
A nice house that cost $100k in 1999 costs $200k today.
A fabulous house that cost $500k in 1999 costs $5,000k today.
My parents bought a home in 1988 for $100k and sold it six years later for $120k. Zillow says it’s worth $590k now. They bought their next home in 1994 for $180k, and it’s now appraised at $650k. This is Sacramento, CA.
By the way, they pay about $3k/year in property taxes, while a new homeowner pays about triple that. If property taxes weren’t kept so artificially low for long time homeowners, I don’t think property prices would have gone up so much.
Inequality is not a bad thing. It's actually necessary to have inequality of outcomes otherwise you have no incentives for improvement. An example of a society with very low inequality is old-school communism where most people are equally poor - it's clearly not a good thing.
What is bad is extreme inequality where a lot of people are in poverty. I think most people would agree that poverty is a bad thing that we should try to reduce.
It's quite possible for poverty to decrease and inequality to increase at the same time. The old "a rising tide lifts all boats" analogy. It just means everyone is doing better but the wealthy are seeing more relative gains. If the whole pie is growing, it's easy to see how everyone could get more pie even if it's not distributed equally.
edit If you disagree please state why. Drive by downvotes do not convince me that I'm mistaken, they just lower my opinion of the average HN user.
I've been thinking about this a lot this past decade or so, and it is an interesting question. One thought I've had is that a perception (real or not) of inequality is baked into our species as being bad, particularly when it gets extreme. Why might that be? Well, if my neighbor generally has more resources than me, it's usually not that big of a deal. You maybe have more or better food, or some nicer things, but if my needs are met and I have things I can enjoy, I don't get worried.
Now, if you suddenly have a lot more than me, say you have enough to provide for other people in a meaningful way, I start to get concerned. Why? Because you don't just have more than me, you start having power over me. And if I don't stop inequality increasing, that could quickly get to the point that I can't do anything about it. Your power can become absolute, for all practical purposes.
I think humanity has learned culturally, if not genetically, that really bad situations arise if someone has way more than you. Power corrupts and all that, and gross inequality becomes power.
Of course, these days, it might not be "real", meaningful inequality (Jeff Bezos has a lot of wealth, but it is wealth tied up in Amazon, mostly, and the US Government has far, far more wealth), but the perception is there, and the perception is enough to trigger concern.
You could probably go further and tie some of that discomfort into competition for mates. If my neighbor had more than me, I might start to worry that he will outcompete me in the market for a mate. I'm not sure this matters as much today - but one can imagine it did for most of human history when communities were much smaller and the majority of men died without leaving offspring behind.
It's an interesting idea, I don't know if there is something to it or not. It's hard to discuss anything involving gender roles these days.
This is really well-stated. The goal should be reducing poverty, not inequality. China for example has drastically reduced the number of people living in poverty while also seeing massive increases in income inequality. Few people would make the case that the average person in China is doing worse than that they would have been 30 years ago, despite the fact that there is clearly more "income inequality".
Typically that would be viewed as high inequality. If the ruling class of .1% controls 99.9% of the wealth then the "average wealth" and the "median wealth" will be extremely different aka wealth inequality.
Yes, exactly. What matters is do you have the resources to comfortably meet your needs or not. It does not matter if some people have many times more resources than you, that does not affect your situation. You might be envious, but that's neither here nor there really in your day to day quality of life.
If we define the federal poverty threshold as having an annual income of less than $1 poverty metrics will improve drastically. Heck, we might even be able to solve it!
It seems like the left is already doing that, just in the opposite direction. Poverty has continued to decrease in the U.S. so we longer talk about it much, instead we focus on "income inequality" because it serves a particular political philosophy. If "income inequality" is a major issue regardless of how well people are doing, then there will always be a reason to intervene in the economy and redistribute wealth, since any society with any sort of market economy will always see an uneven distribution of wealth.
