Thursday, December 5, 2013

The number of “poor” has risen in the EU – or has it?

Francesco Saraceno and the normally very sensible Mark Thomaget all worked up about the fact that the number of “poor” in the EU has risen 1%: from 23.8% of the population in 2008 to 24.8% in 2013.
Personally I’m less than devastated, particularly given the relevant definition of “poor”, which is those living on less than “60% of the national median equivalised disposable income (after social transfers).” See note No.1 here.
In other words if GDP per head were to double in real terms, and every section of the population shared equally in that bonanza (i.e. everyone’s income doubled in real terms) then (shock horror) the number of “poor” would not change one iota!!!
We really need a better definition of “poor” don’t we?

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