The Poor in the US Are Richer than the Middle Class in Much of Europe

In this week's debate, Bernie Sanders claimed that the United States has the highest rate of childhood poverty. CBS reports that Sanders said: "We should not be the country that has the highest rate of childhood poverty of any major country and more wealth and income inequality than any other country,"

As even CBS notes, according to UNICEF, which is probably the source of Sanders's factoid, the US has lower childhood poverty rates than Greece, Spain, Mexico, Latvia, and Israel, all of which are OECD countries or regarded as peer countries. The US rate (32.2 percent) is also more or less equal to the rate in Turkey, Romania, Lithuania, and Iceland. See page 8 of this report.

So, while Sanders probably doesn't even know what he means by "major country" it's clear that the US is not an outlier among OECD-type countries, even by UNICEF's own analysis.

We get much more insight, though, once we have a look at what UNICEF means by "poverty rate." In this case, UNICEF (and many other organizations) measure the poverty rate as a percentage of the national median household income. UNICEF uses 60% of median as the cut off. So, if you're in Portugal, and your household earns under 60% of the median income in Portugal, you are poor. If you are in the US and you earn under 60% of the US median income, then you are also poor.
The problem here, of course, is that median household incomes — and what they can buy — differs greatly between the US and Portugal. In relation to the cost of living, the median income in the US is much higher than the median income in much of Europe. So, even someone who earns under 60% of the median income in the US will, in many cases, have higher income than someone who earns the median income in, say, Portugal.

Here are all the median incomes (according to the OECD's household income comparison statistic called "median disposable income.") When adjusted for purchasing power parity, the statistic allows us to make incomes comparable across countries that use different currencies and have different costs of living. This takes into account taxes, and social benefits paid to households. So, let's use it to compare (the Y axis is in "international dollars"):

We see immediately that income is higher for US households than most of the other countries. What about that high poverty rate, though? Well, we find that the poverty level in the US is still higher than numerous countries' median income level:

The green bar is the US income at poverty levels. So, this tells us that a person at 60% of median income in the US still has a larger income than the median household in Chile, Czech Rep., Greece, Hungary, Portugal, and several others. And the poverty income in the US is very close to matching the median income in Italy, Japan, Spain, and the UK.

Keep in mind that we're using median income here, and not GDP per capita, which means this isn't being skewed up by a small number of mega-wealthy households. So while the US may have a rather high poverty rate, we find that being poor in the US is similar to (at least in terms of income) being a median household in many other countries, including the UK and Japan.

It also does not mention all the welfare, state and fed combined.

49.1 percent of the US population that lives in a household where at least one member received some type of government benefit in the first quarter of 2011, up from 30% in the early 1980s and 44.4% as recently as the third quarter of 2008. As of early 2011, 15% of people lived in a household that received food stamps, 26% had someone enrolled in Medicaid and 2% had a member receiving unemployment benefits. The Census data show that 16% of the population lives in a household where at least one member receives Social Security and 15% receive or live with someone who gets Medicare. There is likely a lot of overlap. http://blogs.wsj.com/economics/2012/05/26/number-of-the-week-half-of-u-s-lives-in-household-getting-benefits/

When the food stamp program was first expanded nationally in the 1970s, just 1 in 50 Americans participated. The 2002 Farm Bill expanded eligibility to noncitizens, made it easier to enroll, increased benefits for families with more children, and adjusted benefits for inflation. The 2008 Farm Bill further eased eligibility requirements, and included higher minimum benefits. Spending after changes in eligibility grew by $185 billion between 2002 and 2008. The 2009 stimulus bill scrapped limits on SNAP benefits to adults without children and raised the maximum benefit by 13.6 percent through 2014. About 20% of the $198 billion growth in between 2009 and 2011 can be attributed to the new eligibility standards, and thus they will not go away once the economy recovers. Veronique de Rugy, “The great Bush-Obama food stamp expansion,” The Washington Examiner, June 28, 2012 http://washingtonexaminer.com/the-great-bush-obama-food-stamp-expansion/article/2500895 ^
An estimated 45 million Americans received food stamps in 2011,at a cost of $78 billion. That is more than a 200% increase in money from just five years ago when 26 million people received benefits at a cost of $33 billion. Some 70 percent of the nearly $1 trillion Farm Bill recently passed by the Senate will be spent on food stamps, representing $770 billion over 10 years.^
15% of the population now receive food stamps, compared with the 7.9% participation from 1970-2000, and has been rising at a rate of 400,000 per month over the past four years [2012]. http://online.wsj.com/article/SB10000872396390444273704577635681206305056.html?mod=WSJ_hpp_sections_opinion#printMode
During February 2010, 1 in 8 Americans were enrolled for food stamps. Since reaching 31.78 million in December 2008, enrollment in Supplemental Nutrition Assistance Program (SNAP) has set a record each month. USDA estimates enrollment for fiscal year 2010, which ends Sept 30, is expected to average 40.5 million people, at a cost of up to $59 billion. Average enrollment for fiscal 2011 is predicted to be 43.3 million people. Reuters, “Food-stamp tally nears 40 million, sets record,” May 7, 2010
The Congressional Budget Office said Thursday that 45 million people in 2011 received SNAP benefits, a 70% increase from 2007. The CBO projected that one in seven U.S. residents received food stamps last year. http://blogs.wsj.com/economics/2012/04/19/food-stamp-rolls-to-grow-through-2014-cbo-says/?mod=e2tw
June 2012: The number of people in America (including noncitizens) receiving food stamps has increasing by 44 percent since President Obama took office in January 2009. Those receiving benefits through the Supplemental Nutrition Assistance Program numbered 46.37 million, meaning about 15% of Americans were on food stamps. There were fewer than 31 million people on food stamps as recently as November 2008, but an aggressive effort by President Obama's administration has helped build participation. http://www.nbcnews.com/business/report-15-americans-food-stamps-980690
During the years 2009-2012, the number of Americans on food stamps increased by an average of about 11,000 per day. http://cnsnews.com/news/article/first-term-food-stamp-recipients-increased-11133-day-under-obama
On Nov. 7, 2012, one day after the 2012 election, USDA reported that 47.1 million Americans were receiving food stamps, a new all time record, and with the monthly increase of 420,947 from July being the biggest monthly increase in one year. http://www.zerohedge.com/news/2012-11-10/foodstamps-surge-most-one-year-new-all-time-record-delayed-release
The USDA dedicated $5 million in 2011 to “improve access to and increase participation in the Supplemental Nutrition Assistance Program. Oregon was the winner of the $5 million performance bonus for being the best at ensuring that people eligible for food benefits receive them, and a second recognition for its swift processing of applications. http://www.judicialwatch.org/blog/2011/04/usda-spends-5-mil-to-recruit-food-stamp-recipients/ http://cms.oregon.egov.com/DHS/news/2011news/2011-0928.pdf?ga=t
The number of businesses approved to accept food stamps grew by a third from 2005 to 2010, U.S. Department of Agriculture records show, as vendors from convenience and dollar discount stores to gas stations and pharmacies increasingly joined the growing entitlement program. “Restaurants want a piece of food stamp pie,” USA TODAY, Money, 9/7/2011
20% of Americans (60.8 million) depend [in part or full?] on government for their daily housing, food and health care. On average, those on government assistance receive more than four times as much taxpayers' money per year (approx. $26,150)- as they would have in 1962, adjusting for inflation. The Heritage Foundation Index of Dependence shows a 12-fold increase from the period of during the Kennedy administration. The rate of dependency increased 31 percent over the past eight years. Heritage Foundation, “The 2009 Index of Dependence on Government,” March 4, 2010 http://www.heritage.org/research/reports/2010/03/the%202009%20index%20of%20dependence%20on%20government
As of January 2012, the federal government was mailing out disability checks to more than 10.5 million individuals. Since mid-2010 the number of people with disabilities has risen by 1.5 million. All of them dropped out of the labor force and are no longer counted as unemployed. Around 5.3 percent of the population between the ages of 25 and 64 is currently collecting federal disability payments, a jump from 4.5 percent since the economy slid into a recession. Mental-illness claims, in particular, are surging. During the recent economic boom, only 33 percent of applicants were claiming mental illness, but that figure has jumped to 43 percent after Obama was elected, preliminary research shows. NY. Post., Jobless disability claims soar to record $200B as of January, February 19, 2012; http://finance.townhall.com/columnists/mikeshedlock/2012/02/21/newest_government_magic_trick_disability_fraud_holds_down_unemployment_rate_disability_hits_record_200b/page/full/
During President Obama's first term, the number of Americans collecting federal disability insurance rose by more than 18 percent. http://cnsnews.com/news/article/first-term-americans-collecting-disability-increased-1385418-now-1-each-13-full-time
In just the first four months of 2012, 539,000 joined the disability rolls and more than 725,000 put in applications. As a result, by April there were a total of 10.8 million people on disability, [SSI and SSDI?] according to Social Security Administration data, a 53% increase from a decade ago, after accounting for all those who've left the program (about 700,000 drop out each year, mainly because they reached retirement age or died. http://news.investors.com/article/608418/201204200802/ssdi-disability-rolls-skyrocket-under-obama.htm?p=full Also see http://www.akdart.com/poverty.html
A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program. From June 2009, the number of new enrollees to Social Security’s disability insurance [SSDI, financed with Social Security taxes paid] program is twice the job growth figure. ^
SSDI now accounts for more than 16% of Social Security's budget and more than 15% of Medicare's (SSDI enrollees can qualify for Medicare after two years.) ^
49% of people live in homes where at least one person gets a federal benefit (Social Security, food stamps, unemployment insurance, worker’s compensation, or subsidized housing) up 44% from the year before Obama took office. ^
More than 11 million Americans are collecting federal disability checks. Half of these beneficiaries have signed on since President Obama took office more than three years ago (2008). http://online.wsj.com/article/SB10000872396390444273704577635681206305056.html?mod=WSJ_hpp_sections_opinion#printMode
Federal welfare spending has grown by 32 percent over the past four years [2012], partly due to President Obama’s stimulus spending and swelled by a growing number of Americans whose recession-depleted incomes now qualify them for public assistance, according to numbers released in Oct. 2012. The biggest item on the list is Medicaid, the federal-state health care program for the poor, which made up 40 percent of all low-income assistance in 2011. The next big program is food stamps at $75 billion in 2011, or 10 percent of welfare spending. http://www.washingtontimes.com/news/2012/oct/18/welfare-spending-jumps-32-percent-four-years/?page=all#pagebreak
The American public’s dependence on the federal government rose to 23% in two years under President Obama, with 67 million (out of approx. 315 million total pop.) now relying on some federal program. Dependence programs” accounts for more than 70% of the federal budget, up from 48.5% in 1990 and 25% in 1962. http://news.investors.com/Article.aspx?id=600452&p=1&ibdbot=1
In 2011, the United States spent over $60,000 to support welfare programs per each household that is in poverty. Converted into dollars the figure is over 2.5 the amount the average household on poverty lives on per year (table is in this link). http://www.weeklystandard.com/blogs/over-60000-welfare-spentper-household-poverty_657889.html
49.5% of Americans did not pay income taxes in 2009, up from 12% in the late 1960s. http://winteryknight.wordpress.com/2012/02/09/dependency-on-government-surges-23-under-barack-obama/
In FY 2011, federal spending on means-tested welfare came to $717 billion. State contributions into federal programs added another $201 billion, and independent state programs contributed around $9 billion. Total spending from all sources reached $927 billion. About half of means-tested spending is for medical care. Roughly 40 percent goes to cash, food, and housing aid. The remaining 10 to 12 percent goes to what might be called “enabling” programs. http://www.heritage.org/research/testimony/2012/05/examining-the-means-tested-welfare-state
Adjusting for inflation and population growth, the U.S. now spends 50% more on means-tested cash, food, and housing than it did in 2002. ^
If converted to cash, means-tested welfare spending is more than sufficient to bring the income of every lower-income American to 200 percent of the federal poverty level, roughly $44,000 per year for a family of four. (This calculation combines potential welfare aid with non-welfare income currently received by the poor.) ^
Federal welfare programs includes 12 programs providing food aid; 12 programs funding social services; 12 educational assistance programs; 11 housing assistance programs; 10 programs providing cash assistance; 9 vocational training programs; 7 medical assistance programs; 3 energy and utility assistance programs; and 3 child care and child development programs.
According to the President’s spending plans by 2014 welfare spending will exceed $1 trillion per year. By 2022 total means-tested spending would reach $1.57 trillion.^
To support the 83 [many overlapping] programs that Congressional Research Service in Oct 2012 identified as welfare programs, the federal government spends $745.84 billion. That dollar amount exceeds the $725 billion spent by the federal government on Social Security, $480 billion on Medicare, and $540 billion on non-war defense. In all, the U.S. government, including federal and state governments, spends in excess of $1 trillion on welfare. http://www.weeklystandard.com/blogs/welfare-spending-now-largest-federal-budget-item_654849.html
The amount of money the federal government hands out in direct payments increased 32% during first three years of Mr. Obama's Presidency. http://patriotupdate.com/17823/food-stamps-up-45-federal-handouts-up-32
In 1988, there were 4.46 million SSI [Supplemental Security Insurance], financed through general revenues from taxes, meaning benefits are not based on your prior work history] recipients, 6 million in 1993 and in 2011 there were 8 million. http://www.cato.org/pubs/pas/pa-224.html; http://www.socialsecurity-disability.org/disability-benefits
Despite nearly $15 trillion in total welfare spending [$19.8 trillion in inflation-adjusted 2011 dollars] since Lyndon Johnson declared war on poverty in 1964, the poverty rate is perilously close to where it was more than 40 years ago. http://www.cato.org/pubs/pas/PA694.pdf
Since President Obama took office [in January 2009], federal welfare spending has increased by 41 percent, more than $193 billion per year, a 42 percent increase over welfare spending in 2008. And over the next decade, welfare spending is projected to cost taxpayers $10.3 trillion. ^
In 2011 the federal government spent roughly $668.2 billion on 126 separate and often overlapping anti-poverty programs. These include 33 housing programs run by four different cabinet departments, and 21 different programs providing food or food-purchasing assistance, along with 8 different health care programs, and six cabinet departments and five independent agencies oversee 27 cash or general assistance programs. All together, seven different cabinet agencies and six independent agencies administer at least one anti-poverty program. ^
At least 106 million (almost 1 out of 3 of all ages) Americans receive welfare benefits from one or more welfare programs (excluding Social Security, Medicare, pensions etc.), with Medicaid and food stamps having the highest percentages. ^
Medicaid is the single largest welfare program at $228 billion in 2011. Supplemental Nutrition Assistance Program (food stamps) was the second most expensive welfare program at nearly $72 billion. ^
In fiscal year 2008, anti-poverty spending was $475 billion. In fiscal year 2009, when Obama took office, it had risen to $590 billion. Income limits for eligibility have risen twice as fast as inflation since 2007 and are now roughly 10 percent higher than they were when Obama took office, representing an increase of more than $193 billion since his presidency began. ^
State and local governments provide additional funding for several of these programs and also operate a number of programs on their own, adding another $284 billion per year. If one includes state and local welfare spending, government at all levels will spend more than $952 billion this year to fight poverty, just short of the trillion dollar mark. To put this in perspective, the defense budget for 2012, including spending for the wars in Iraq and Afghanistan, totals $685 billion. ^
From the end of 1989 through 1996, the number of children receiving SSI benefits more than tripled from 265,000 to about 955,000. (Adults are considered disabled if they are unable to engage in substantial gainful activity by reason of a medically determinable physical or mental impairment expected to result in death or last at least 12 months. 42 U.S.C. § 1382c(a)(3)(A).) United States Government Accountability Office, Statement of Daniel Bertoni, Director Education, Workforce, and Income Security, October 27, 2011 (http://waysandmeans.house.gov/UploadedFiles/Daniel_Bertoni_Testimony_1127.pdf)
SSA data show the number of child applicants with mental impairments increased 60 percent between fiscal year 2000 and fiscal year 2010, while the total number of SSI child beneficiaries with mental impairments on the rolls grew 52 percent from 543,000 to 827,000. In fiscal year 2010, about 62 percent of all SSI child applicants had a mental impairment as a primary diagnosis, and about 67 percent of those applicants were medically approved for benefits. ^
The number of children found to be medically eligible for SSI due to speech and language delay nearly tripled between fiscal years 2000 to 2010. ^
As of December 2010, the average monthly child benefit was $597. All but five states and the Commonwealth of the Northern Mariana Islands supplement federal SSI benefits with additional payments. ^
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