Saturday, July 12, 2014

NZ poverty line much higher than US

The Feminist News carried an article about poverty in the US.
The 77 million Americans who live in poverty areas - defined as an area where over one-fifth of the residents earn incomes below the current poverty line of $23,600 for a family of four - is a significant increase from the 18 percent recorded by the Census Bureau in 2000.
I checked this with a government resource which has a slightly different poverty line of $23,850.

I am interested how their poverty line compares to ours.

Currently US $23,600 equates to NZ $27,066.

NZ uses an equivalisation (see P43 for explanation) method to make various household types comparable.

Table A4 (reproduced below) shows that a family of 2 adults and two children would need $28,100 to have the same purchasing power as a family of 1 adult and one child on $18,300. 


The HES finds:
 "The overall median BHC household disposable income in the 2013 HES was $67,700 (ordinary dollars). In equivalised terms this is 33,500 dollars per equivalent adult."
We commonly use 60 percent as the poverty threshold. Apply it to the equivalent adult sum above to get $20,100.

We can then go back to table A4 and work out how much that would equate to for a family of 4.

At $20,000 the amount required to have the same purchasing power is $43,400.

Below that and you are in poverty.

So our commonly used poverty line for a family of four is $43,400 compared to America's $27,066.

Our poverty line is 60 percent higher.




Table A.4
Conversion of equivalised dollars to ordinary dollars for households with low-to-middle unequivalised incomes
Equiv income
Income for families and households of various types
in ‘ordinary dollars’

(1,0)
(1,1)
(1,2)
(1,3)
(2,0)
(2,1)
(2,2)
(2,3)
(2,4)
(3,0)

1.00
1.40
1.75
2.06
1.54
1.86
2.17
2.43
2.69
1.98
$10,000
10,000
14,000
17,500
20,600
15,400
18,600
21,700
24,300
26,900
19,800
$11,000
11,000
15,400
19,300
22,700
16,900
20,500
23,900
26,730
29,600
21,800
$12,000
12,000
16,900
21,000
24,700
18,500
22,300
26,000
29,160
32,300
23,800
$13,000
13,000
18,300
22,800
26,800
20,000
24,200
28,100
31,600
35,000
25,800
$14,000
14,000
19,700
24,500
28,800
21,600
26,000
30,400
34,000
37,700
27,700
$15,000
15,000
21,100
26,300
30,900
23,100
27,900
32,600
36,500
40,400
29,700
$20,000
20,000
28,100
35,000
41,200
30,800
37,200
43,400
48,600
53,800
39,600
$25,000
25,000
35,100
43,800
51,500
38,500
46,500
54,000
60,800
67,100
49,400
$30,000
30,000
42,100
52,400
61,600
46,100
55,900
64,800
72,900
80,600
59,300
$35,000
35,000
49,200
61,200
71,800
53,800
65,200
75,600
85,100
94,000
69,200
$40,000
40,000
56,200
69,900
82,100
61,500
103,700
74,600
86,400
97,200
79,000
$45,000
45,000
63,200
78,600
92,400
69,200
83,900
97,100
109,400
120,800
88,900
$50,000
50,000
70,236
87,367
102,641
76,844
93,200
107,900
121,500
134,300
98,800

·      This table uses the 1988 Revised Jensen equivalence scale, as does the rest of the report, except where it is stated otherwise.