Tim Worstall takes it to the Economic Policy Institute

Here’s the link.

Here’s the spiffy quick-quote:

 In the USA the poor get 39% of the US median income and in Finland (and Sweden) the poor get 38% of the US median income. It’s not worth quibbling over 1% so let’s take it as read that the poor in America have exactly the same standard of living as the poor in Finland (and Sweden). Which is really a rather revealing number don’t you think? All those punitive tax rates, all that redistribution, that blessed egalitarianism, the flatter distribution of income, leads to a change in the living standards of the poor of precisely … nothing.

My time is broken up with training-prep and class-prep today, so blogging’s going to be light.  As I start teaching while working, you’ll see less blogging until I’m well into my routine.  So more “pointer links” for the short-term.

Leave a comment


  1. eowyn

     /  August 28, 2006

    “…in Finland (and Sweden) the poor get 38% of the US median income.”

    But what percentage of the Finnish or Swedish median income?

  2. Much, much more, since what you see happening is that these countries, which are held up to be bright economic stars, have something like 80% of their population earning less than the US median income. So in effect, what is being said is that Sweden is significantly poorer, even though their poorest and our poorest earn about the same money. US Median household income is roughly 44,000. So once you take out your super-rich, whose wealth is largely not classified as income, this is pretty telling.

  3. More data here if you want to do some drill-down:


    For instance, the Dallas MSA has a household median income of roughly 65k.  So beating that by roughly 25% theoretically puts my wife and I, both of us high-end Admin Assistants, as far above the regular earners as the average Swede is ever likely to get.

  4. Also, it would be instructive to see the difference in median income among these three. The quote does not address what the median income actually is, just the pecentages of that median income. Also, if “poor” is defined in terms of an income that is less than a certain percentage of the median income, then the claim in the quote is mere equivocation..

  5. Sorry that was I in comment #4.

  6. Zathras

     /  August 28, 2006

    Income is not the same as living standards. In fact, it is probably the worst possible tool of comparison of living standards between the poor in different countries. It doesn’t take into account the free health care received by the Scandanavians, more generous housing assistance, state-sponsored day care, and any number of other social programs. If these were factored into income, the Scandanavian numbers would be significantly higher, and the disparity would be very clear.

  7. Zathras: Those numbers are in fact post tax, post benefits. So, yes, they do take account of all of the things you mention. Which is why they are so interesting, of course.

  8. Zathras

     /  August 29, 2006

    Not quite. According to the sources you cite, Tim, while they do include “public transfer payments” (Smelting’s phrase), such as welfare, unemployment compensation, this is hardly comprehensive of all benefits received by the poor. There is no attempt to place a value on the benefits, such as free health care and free child care, which do not involve payments to the poor. Including these benefits will drastically change the numbers.

  9. Zathras

     /  August 29, 2006

    (Site Owner here:  This comment was in moderation unbeknownst to me and did not appear until 11:10 a.m. CST.) 

    In fact, the source from which Tim lifted this graph:

    (page 25) brings up the exact same issue. “To the extent that these countries provide more social and economic support to their citizens than the United States, these numbers provide a somewhat incomplete comparison regarding the living standards of low-income people.” It is apparent that this is Tim’s source for the data, since both have the “Figure 8D” label

    To ignore this sentence when it comes straight from the source one is using and directly explains the data one is using reeks of political hackery.

  10. Um, Zathras… those “free” programs are paid for by the rest of society. Thus, said redistribution is reflected in the chart: just not where you’re looking.

  11. Zathras

     /  August 29, 2006

    And your point is….?

    The point of the article is that the poor in the US have about the same living standard as those in a Finland in Sweden. The data used to back this up was that “38” is almost the same as “39.” My point was that “39” (or “38” for that matter) did not include all benefits to the poor, which is the same point made by the source used by Tim.

  12. Said chart is a fiscal critter, not a QOL comparison,and as you should well know, a comparison between crappy bottom-rung socialist medicine vs. crappy pseudo-free emergency-room care for the poor here in the U.S. would constitute a separate study in and of itself.

    I don’t have a problem with the specific point you’re raising, but in how you’re taking aim. You’re accusing Worstall of playing a terrible game of water polo because the goalie doesn’t move two spaces forward and one lateral in preparation for a queen-side castle.

  13. In response to comment #9 (just released from moderation queue):

    Having been both a severely impoverished American in need of medicine for which I had to pay a trivial sliding-scale fee (in exchange for which I received fantastic diagnostic work on a cardiac condition), and equally a recipient of socialized health care (in which case I received absolutely appalling medical care roughly equivalent to something from the 1950s, twice, but paid nothing), I remain unconvinced that one can simply draw a line suggesting that said individuals in Sweden have it better.

    To immediately run from this to “hackery” is simply ad-hominem.

    Now, what your point, which is valid to discuss, DOES bring up, is something on the lines of “why does the UK seem to do okay by these measures, when Sweden and Finland do not?”

  14. Zathras

     /  August 29, 2006

    I used the term “hackery” because he lifted 1/2 an issue from a source, when the other 1/2 was directly on point to what he said. It’s the same thing as there was a sentence “Johnny’s score was the highest on the video game because no one has played yet,” and he quoted “Johnny’s score was the highest on the video game.” It’s either dishonest, in that he was attempting to mislead the reader, or simply incompetent, since he did the most superficial read possible, just looked at the graph, and quoted it as the final word, without even reading the next couple of sentences. Either way, it is hackery.

    In terms of the issue you raise about England vs. Sweden and Finland, my guess would be the difference is how the social spending reaches the person using it. Perhaps in England it is distributed more through direct handouts, while in Sweden etc. it is provided through more free things. Housing subsidies for example could be done either way. You could have direct payments to the poor to defray the cost of housing, in which case the study quoted would count as income, or you could have massive public housing projects with free places for all, in which case it would not count as income.

  15. The question is, “which, and in what quality?”


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