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COSM Commentary

Has Inequality Made Americans Poorer than Bulgarians, Russians, and Filipinos?

December 11, 2023

A recent column by John Burn-Murdoch in the Financial Times presents statistics side-by-side showing that “the wealthiest Americans are the richest people in the developed world, but America’s poorest are also the most likely to go hungry.” The chart buttressing the latter part of that conclusion shows that in over 12 percent of American households, “someone skips a meal at least once a month because there is not enough money for food,” putting it atop of a list of 18 countries. But the statistics he cites badly overstate American rates of hardship—“extreme poverty” in Burn-Murdoch’s words.

The data Burn-Murdoch uses comes from a project attempting to provide internationally comparable statistics, the International Social Survey Programme (ISSP). The ISSP relies on consistently worded questions included in individual countries’ surveys at roughly similar points in time. For the US, the estimates come from the respected General Social Survey (GSS). The 2021 GSS asked respondents, “How often do you or other members of your household skip a meal because there is not enough money for food?” The results of the survey indicate that 12.6 percent of households answered “once a month” or more.

That compares with 6 to 9 percent in Lithuania, Finland, Norway, France, Australia, Great Britain, the Czech Republic, and Israel and with 2 to 6 percent in Slovenia, Austria, Italy, Iceland, Sweden, Germany, Japan, Denmark, and Switzerland. In fact, of the full list of 29 countries with data in the ISSP (including some not shown by Burn-Murdoch), the US betters only Chile, South Africa, Suriname, and Venezuela. Implausibly, it has a higher rate of food insecurity than the Philippines, Thailand, Russia, and Bulgaria.

Is it true that 1 in 8 American households are so poor that someone must skip a meal each month to get by? No, it is not—the real number is more like 1 in 50. The best data on this question come from the US Department of Agriculture’s annual Food Security Supplement—an add-on to the venerable Current Population Survey that is sponsored by the Bureau of Labor Statistics and fielded by the Census Bureau. Those data show that in 2021, just 2.0 percent of households responded “almost every month” after being asked how often in the last 12 months any adult “cut the size of your meals or skip[ped] meals because there wasn’t enough money for food?” This share is less than a fifth as large as the GSS figure, and it is lower than even Slovenia’s 2.15 percent. Moreover, it includes not only adults who skipped a meal but who cut the size of a meal, and it includes not only adults who did it once a month, but adults who “almost” did it every month.

Why is the GSS figure so high? One likely reason is that the 2021 wave was fielded during the COVID-19 pandemic—from December 2020 to May 2021, before the widespread availability of a vaccine. Because of the pandemic, the administration of the survey was conducted via mail and web-administered self-surveying. In the past—and again in 2022—it was fielded over the phone and in person by trained surveyors. As a result of the temporarily modified administration, fewer people cooperated when approached to participate in the survey. The response rate fell from 60 percent in the 2018 wave to 17 percent in 2021 before rebounding to 50-51 percent in the 2022 wave. A big concern when surveys have low response rates is that the people who do respond aren’t representative of people generally—they may be unusually poor, for instance. Alternatively, it may be that representativeness did not suffer in 2021, but respondents answered less accurately when they replied by mail or online than when asked questions by a trained surveyor.

Unfortunately, the question on meals was asked in the GSS only in 2021, so we can’t tell whether the changes affected the prevalence of reported food problems.

Another potential issue in comparing the US figure in the ISSP is that the estimates for many of the other countries come from pre-pandemic surveys. This was true for Slovenia, Italy, Sweden, Japan, Denmark, Switzerland, Finland, Australia, and the Czech Republic. However, the pre-pandemic Food Security Supplement from December 2019 indicates a similar level of food hardship as in 2021.

Rather than comparing these probably incomparable food hardship estimates, we can look at harmonized cross-national data on poverty from the widely respected Luxembourg Income Study (LIS). For instance, poverty in the US is much lower than in Eastern and Southern Europe. While the ISSP figures indicate that Italy’s rate of food hardship is 3 percent and the US’s is nearly 13 percent, the LIS data put Italy’s poverty rate at 18 percent and the US’s at 10 percent.

The American poverty rate is probably somewhat higher than in its peer countries in Northern and Western Europe and the former British Empire, but even here the differences are smaller than the ISSP suggests. The ISSP food hardship rates are 4.5 percent in Germany, 7.5 percent in France, 8.0 percent in Australia, and 9.1 percent in the UK (versus 12.6 percent in the US). The LIS poverty rates are 6.4 percent in Germany, 7.4 percent in France, 6.0 percent in Australia, 9.0 percent in the UK, and 9.9 percent in the US. These LIS differences are modest in spite of the fact that we have a less generous welfare state. As noted by Burn-Murdoch, that smaller welfare state is a function of cultural preferences, not income inequality.

Also worth noting: based on my analyses of the LIS, median income in the US is higher than in any of its peer nations in Western Europe, the former British Empire, Israel, South Korea, and Japan. It is exceeded only in Norway (which sits alongside huge offshore oil reserves) and Switzerland (a banking center and tax haven for the global rich). Our middle class is 24 percent richer than Germany, 25 percent richer than Sweden, 36 percent richer than France, and 39 percent richer than the UK.

Burn-Murdoch worries that, as his op-ed’s title puts it, “the American dream foster[s] inequality.” He is probably right that the American dream “makes US society more tolerant of large disparities.” But he is wrong that it “continues to fail so many.” Inequality bears no clear relationship to poverty. The US has high inequality, high middle-class incomes, and poverty rates that are similar to those of other rich countries that have more redistribution and less single parenthood. Far from failing Americans, the ideology of the American dream has likely been a force for making the US the most vital and innovative economy in the world.