Well said.



According to world statistics poverty is shrinking and the extremes are moving close together. However they are still extremes and those are what throw off many statistics.

Generally I dont trust statistics, plus I know that poverty is almost common plac ein many parts of the world.



Ouch,though I fell the same way I wouldnt have worded that so strongly.

We dont want another closed thread so I advise everyone to stay civil.



That is why I think it works in Europe, the people there undestand what others sacrifice for them, in a sense Europeans are the most patriotic people arround.



Exactly my view.

I mean you cant just say that every person on the streets is improvished because its their fault.

It is like saying that it is the fault of a mentally disabled person that they were born mental disabled.



People are actually moving up into the middle class and upper class bracket, the precentage of people that are actually improvished in this country is now bellow 10%, I would say that is a good thing. Sure the rich can do without the tax cut to buy that new yatch with a golf course on it, but we have a president who firmly believes Reagonomics work and so the idea is that the rich people are supposed to funnel the extra cash into investments... yea, right.



I have actually found some very interesting statistics. There is only one reason for gas prices going up, that is to make up for the shrinking demand.

Refinery prices area actually going down, and so are drilling prices. Yet, for some reason gas is getting more expensive. Meanwhile the gas companies are posting record profits and claiming that they are experiencing the highest prices for manufacturing the gas in years. How can this be true with RECORD profits.

I mean look at Exxon(by the way dont buy gas from them),they dont poor a penny into research for cheaper, cleaner, and more efficient fuel. They also make the most money out of any company in the world, last quarters estimates came in at about 40 billion dollars.

hehehe... yes, there is upward mobility, but there's also a lot of downward slipage, too. i don't have stats for that handy (i'm about to leave for the day). question: are you using the government's percentage of people living in poverty? one thing to consider is that the governments way of establishing who's in poverty and who isn't, well, sucks. they're still using 25% as the average percentage of a family's income that goes towards housing, though for most it's between 40-50%.

i would distruct stats a lot too, but a had a year of statistics for social science. so i can read statistics very well, and if there's enough info presented about the methodology, figure out exactly what they're telling me. it's stats that don't include anything on methology that i totally distrust.

No, I got it from a composite graph of the worlds top 10 economical powers and the break down of poverty levels.

It has probably changed by now and I dont know its direct source.



I took half a year of psychology and the second thing(the first was dont become a psychologist ) our professor told us is that statistics are more of a rough guide line then anything, usually you start to develope your own sense of the norm.

You may have been taking me out of context or maybe I was unclear. "Those wretches" I refer to are those who CHOOSE to become beggars. I'm not against helping those who NEED it, and not looking down upon them. I do, however, despise those who are perfectly able to find a job but decide it's not worth their while. I recall one particular article from the China Daily about Taiwan's "Beggar King". This was a man who had a home and a job, but he borrowed money from a neighbor and never gave it back, having decided after accepting the money that begging for money (which he himself admitted in an interview) was easier than working. He sold his home and moved to the streets, and ended up with 2.2 MILLION Taiwan dollars. He decided to take on an apprentice to teach the art of begging so he could retire. Now that, to me, is a WTF situation right there. No one is required to believe me, as I can't come up with a website link to it, that's your perogative.

Wow, 2.2 MILLION from BEGGING?!   

I believe you 100%, as we actually have a 'professional panhandler' here in Pittsburgh as well. He hangs out at the entrance to the Fort Pitt bridge during the evening rush hour and hits up the going home crowd. He has had a couple of articles done on him, mostly in student newspapers, and he does quite well. He dresses the part, old raggy GI clothes... you know, the whole nine yards. But by night, well, that is quite a different story.
He has a very nice apartment in town and a BMW... can't remember the model, but I think they said it was about a 75K car. He could 'retire' in his own words right now, but why should he, as he believes he has the world by the balls right now and a very good income for doing 'nothing' as he puts it. He actually thinks of himself as an 'entertainer'... why I have no idea. I should have spit on him when I had the chance a few years ago but alas, I wasn't feeling very evil that day.

Hi Dystopic, please let's be nice

Prices increase due to the increase of money supply by central banks, inflation is always and everywhere a monetary phenomenon. That's why the value of gold is solid and the dollar will at some time be worthless. You always have to deflate prices, and that is what you do with a CPI index to arrive at the REAL value of something. In other words, a dollar 30 years ago could purchase more than the same dollar now. (By the way CPI index do not control perfectly for quality changes, such as with computers and cars)

Further, one should look at the income after taxes and goverment transfers and consequently one should look at the consumption expenditure, since this is the true measure economists look at when you consider welfare changes.

Look at the publications of Alan Reynolds (http://www.cato.org/people/reynolds.html) from the Cato institute he has some nice stuff on this issue.

Furthermore, I suppose the case you refering to is the US, I was mentioning Western countries, perhaps in specific cases such as the US things are different, but I still thing US consumers spend a smaller share of the total consumption on food than 30 years ago.

Throw shoes at him Stormbringer!

Does this mean that we are faced with a declining standard of living? It could be...



w00t! I'm no longer alone!



What? Check productivity per man hour, check rise in GNP. Check the tax rate. Then look at the mobs in the street every few months. I wouldn't say that socialism is working in Europe.

And as for patriotic, well, the only time they stand up is when someone is coming over their border. The rest of the time their heads are in the sand.



A good definition of poverty would help define this discussion, too. Is it living in a mud hut and picking through camel dung for grain? Or is it not being able to pay the rent on your 3-bedroom, air conditioned apartment? And what is it that we want the minimum standard of living to be?

Actually, Dystopic is very nice. He's also smart. He has proven me to be wrong, too.

He is a worthy foe.

yes, i just realized he's still a student in econ. Sorry arstal, i didn't mean to be so aggressive.



usually. everyone has a snarky side.



yes, and this was actually something i was speculating on. the average across categories has gone up, but i think you may be at least mostly correct (i was interested in doing a second chart to compare across categories).

and yes, i was talking about the U.S. while it's very possible food is more affordable, the cost of housing is insane. a lot of my coworkers here in San Diego say that if you pay less than half (half!) your net income on rent/mortgage, you're doing pretty well.

But why a foe?


Anyway, my memory from 20-30 years ago is that two-car families were much more uncommon. Now, it's not uncommon to have three- and even four-car families. But we also used to have a lot more stay-at-home moms, so you really didn't need the second car. Now it's like both parents work, but the car expenses and day-care pretty much eat up one parent's entire paycheck. So strictly dollar-wise, so-called "standard of living" went up, but yet quality of life went down. Now we're a society of adults who grew up on day care.

why not? heh. i'm my own foe; i know too much for my own good.



a very, very good point. kind of Brave New World-ish, if you ask me.

Some people dont have a choice left. When your missing a limb or two or cant comprehend things well not many people will hire you and the government often forgets to give help.

Would you condemn all of those people.

I'm not sure, but I think that the evaluation of the current generation's wealth in comparison to the wealth of past generations comes from the analysis not of cost of living, but of quality of living.

While the CPI and inflation are increasing at an astounding rate, the cost of electronics is simply plummeting; if you don't believe me, just think about the cost of, say, home computers in the past fifteen or twenty years.

This isn't limited to just computers, mind you - nearly everyone in the United States that isn't in financial ruin (and even some that are) own their own car. That's something of a step up from even a hundred years ago. How about electrical connectivity? Air conditioning? Indoor plumbing? Cell phones?

I know, I know, I'm detracting from the point of the poverty line, I'm just trying to add my two cents on the whole 'poor richer than the then-rich' line of discussion.

Some good points have been raised in this thread.

I believe people should have the right to decide where their money goes. If i snatch a dollar from your hand without asking would that not piss you off? But if i asked you for that same dollar, you might have given me 10!

Anyhow, to be honest, i probably wouldn't give any money to a poor person if they asked me on the street. It dousn't feel like your being generous, it feels weird, discomforting, i dunno why? Apart from that there is always the thought in the back of my mind that i would rather give my money to starving children overseas who do not live in a country of opportunity like this weirdo standing in front of me asking for money is living! I already have 2 foster children even though my salary is only 25 thousand a year AUD or 20,644.34 USD net.

How do people become destitute in a rich country anyhow? Well in Australia there are several ways...

Anyone looking for the quickest way end up destitute on the streets with less than half the intelligence they used to have, simply become a drug addict!

If you get divorced in Australia, typically the husband will loose everything and end up on the street with just the shirt on their back. I used to work for the salvation army and at least a quater of all the down and outs i met came undone this way.

If you a little stupid but not stupid enough to qualify as disabled then you can easily end up destitute on the street. Qualifying for unemployment benefits is getting very technical these days which means stupid people can easily, very easily be unable to recieve any benefits as a result.

Also it may seem a contradiction in terms but crime also often leads to ending up destitute on the street. I have to say that not only does crime not pay, but often crime will actually cost you everything!

My parents didn't own a house. We rented. But we had two cars.

My wife's parents always owned. They never had a car until she got her driver's license and bought one.

I think we are better off than our parents. I just hope the same is true for my kids.



One of the costs of our "War on Drugs" is the incredible number of people who are walking around with a felony drug conviction. That can destroy your ability to find useful employment since background checks are now so common.

No, I would not condemn those who have their situation thrust upon them like that. I do condemn the beggars-by-choice, though. There's a difference, and it's not really easy to explain unless you've known the beggar scene in China for a few years. I've seen too many scam artists to be moved by anything other than an obvious crippling deformity or lack of appendage. Some people DO need help, that's fine, they should be helped if we can. The others should either stop leeching and get to work like the rest of us or remove themselves from the world. There are already too many people who DO need help to put up with those who "can't be bothered".

From what I hear Austrailia is no longer the "lucky" country anymore.



I hope so too, being part of that younger generation. One thing I know Bush has right is his social reform policy and if his reputation wasnt ruined by the war I think he would have become a great domestic president.



Which part of China?
If it is the urban area then that is of no surprise, same thing happens here.



Niether would I, they would probably waste it away on something very useless like alcohol. No, I would probably make sure they got to a shelter and got food and nicer clothing and some form of work.

I mean one time I was at Navy Peer in Chicago and I saw a deaf woman walking arround the mall trying asking for money from strangers, she used sign language and passed out pamphlets about deaf people and their troubles.

I came up to her and unlike most who just shook their heads and walked away I handed her 10 dollars, and you could just see in her eyes a glint of happiness and hope. She was so happy she was lost for... signs, she gave me a pamphlet and taught me a few short phrases it was quite an experience.

I think the sad part is that so many people don't take drugs seriously! That or they don't take their own lives seriously (even sadder).



Actually that would be true if it wasn't an election year! just this week the federal government released their new election bribing budget - yum yum

Hi everyone,

Usually I don't pipe up in these debates, but it bothers me when people use statistics without understanding them.

All me to introduce myself. I'm a Finance and Economics graduate from Canada and I now work in the video games industry (Threewave Software, we make FPS games) as a finance professional.

Dystopic, the first graph you use looks misleading because it shows absolute amounts, and not growth rates. It's true, the bottom percentile grew by a pitiful absolute amount, but relative to it's starting position, it had a startling growth rate. If you count the number of times that the line goes up and goes down, in pixels, the bar goes up by 4 pixels over a 30 year period. By eyeballing, it looks like it started at around 10 pixels above 0. So it grew from roughly 10 pixels to 14 pixels. That's a 40% increase! And remember, that graph was adjusted for inflation, so that's a 40% increase in real income.

Now let's look at the top percentile. They started at about $90,000 and ended at about $155,000, which is about 72% growth. So the rich are getting richer very quickly, that's for sure. But by no means are the poor getting poorer.

Second is your CPI index. You used this incorrectly. Yes, the CPI index is increasing rapidy now, especially if you use your base year as 1913. Do you know what an exponential function is? What does a graph look like if you increase the CPI constantly by 2% every year? Inflation is not increasing, it's just that inflation is compounding on inflation.

Third, the standard of living graph that you use was adjusted for inflation. That means that the CPI was already incorporated into that handy little graph. This means that the first graph tells us that even after taking into account inflation (i.e. increases in the CPI), real income increased by 40% for the poorest 10% of the population.

So your own statistics prove that capitalism is making the poor very much better off!

Secondly, measures of welfare increases over time are extremely conservative. This is because economists do not take into account improvements in quality in their standard basket of goods. Sure, a car might be 4 times as expensive as twenty years ago, but inflation is not the only factor that contributed to that. Cars now have airbags, seatbelts, CD players, anti-lock breaks, more efficient fuel consumption, and so on. CPI measures do not take this into account at all. They simply compare the price of a new car today against the price of a new car twenty years ago.

If you took improvements in quality into account, you'd get around a 70%-140% estimate for an increase in the bottom 10%'s real income, depending on which economist you ask. That huge spread results from different methods of measuring quality. There is no established method for measuring quality, which is why economists are forced to use the extremely conservative CPI method of measuring gains in real income.

I hope that I helped to clear up any confusion around the use of economic statistics!

Thanks, Ian. I felt that to be true but I couldn't begin to explain why. Great explanation.

One of the reasons I like discussing these issues on the GalCiv forum is that you guys are pretty smart.

Yes, Emperor, it's urban China. Shanghai, specifically. Though we've also encoutered it in Beijing and any place that attracts tourists in the lesser known cities. My experience is that beggars are simply unknown in rural areas of China. At least, any of the rural parts I've been to.

I don't much care for giving money to the poverty stricken directly, though I would be perfectly willing to give food. Oddly, I've yet to meet a beggar 'round these parts willing to accept food. Organizations to help the underclass are starting to appear, though for the most part it's a case of extremely wealthy people giving directly or seting up their own funds, rather than go through intermediaries. Especially after the rash of recent scandals regarding cut-and-run scam artists who take the money meant for aiding others and embezzling the hell out of it. I just read an article in the paper today, and there was a sadly all too true statement by a rich fellow who wished to remain anonymous. He said, "The reason I don't go through organizationr or make my giving public knowledge is because then you get a sudden crowd of people asking for money all the time, and if you don't give it to them, they will call you unkind." He knows all too well that having attention drawn to his kindness will createa no-win situation.

I completely empathize with his plight. His heart is in the right place, but if he doesn't keep a low profile, he will invite a flood of lazy crapsacks to pester him and spread false statements about him.

That said, there are a number of promising programs popping up to help the rural residents "catch up" to the urbanites.

i don't know if you missed this, but i trained as a sociologist. i know statistics quite well.



i wasn't about to make a new graph at that point, though i ended up doing it for the second graph anwyay (the first one's from wikipedia).

misleading? to whom? the problem with a lot of economics training is that it's overly focused on things from the top down; statistics are tools for answering questions, but statisticians rarely get to decide what questions are asked.



actually, you're describing a recursive function. moreover, the CPI index itself is adjusted for inflation. why would anyone adjust inflation for inflation? inflation is an estimate on how much the cost of things should increase; the CPI shows you how much they they did.

the CPI isn't a perfect measure of the cost of living, for sure. if i had time (it's taken me hours to compose this response in the middle of my workday), what i'd really like to see would be:
-all figures adjusted to the same inflation level
-earned income less minimal cost of living (a figure representing disposable income, when positive, or the gap between income and need, when negative)
-broken down by SES, age, race, urban/rural, and region.

one of the problem with a lot of government stats that are used to determine policy is that they obscure a lot of more unique situations by using averages. social workers and local government are assumed to make of the difference, but neither really have the resources to effect any appropriate change.



i'm not sure which graph you're referring to, but i think you meant the first. though closely related, historical CPI and inflation are not the same thing. if they were, adjusting CPI for inflation would result in a flat line graph. inflation is estimated with the CPI, among other things (include currency values and GDP). the point of posting both of those charts what to compare actual earned income to cost of living.

inflation is actually a very abstract concept with no direct means of measurement. try looking up a definition of it, and you'll probably find something like "a mark of economic growth, except when there's too much of it, which means economic collapse." at best, that's an over-simplification. among many things, inflation represents the manipulation of supply and demand to ensure profitability. when the costs of production outweight any profits you'd make by allowing a product to be affordable by lower SES strata, the price is inflated. from a business point of view, it's a matter of optimization.

but there are other points of view. take bananas for example. argo-businesses in the U.S. grow a lot of bananas aborad, especially in central america. it's not uncommon around one of these facilities to see dumptrucks full of bananas dropping their loads into lakes, and only moments later villiage children rushing out into deep and often polluted waters scrounging for a meal. why on earth would they throw bananas away? to keep the costs up and make more money. the "unfortunate" side effect is that some people can't afford those bananas.

and to boot, i'm pretty damn sure they're lower quality than anything you could get locally grown (if you live in a climate that'll support banana trees).



all those perks don't mean a thing to people who can't afford the car to begin with. it might not seem like it matters with things like food. but consider that families typically have fewer domestic resources now (two working parents, lots of single-parent families, multiple part-time jobs, and more demanding work). this makes from-scratch cooking nearly impossible, and for many convenience food (not necessarily fast food, but also things like preparred meals) is the only chronologically feasible diet. that kind of food isn't nearly so affordable as a pound of uncooked pinto beans.



and what would you hear if you asked a poor person?

* * *

i just thought of something i'd meant to bring up. none of these stats include the homeless, partly because the homeless population is largely unquanifiable. and i want to take a step back from numbers for a second.

these forums have seen a fair share of loyalty and admiration, by americans at least, for the U.S. armed service men and women. they do such a service for our country! but a huge portion of most city's homeless are war vets often suffering from PTSD.

some conservatives have a way of saying, "you can help the poor, but do it with your own money," or, "you don't like things, fine, but put your money where you mouth is and do something about it." some of these are the same conservatives calling people like me un-patriotic for criticizing the military campaign in Iraq, saying "support our troops."

well, why don't you put your money where your mouth is? and get these poor homeless vets off the streets and into somewhere they'll be safe and receive what help is possible!

Yes but if a car manufacturer built a car without those perks then they would be competing with the second hand car market to attract poor customers. At the end of the day, as a vehicle manufacurer your not going to be able to compete in price with a 30 year old ford escort!!!