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The Economist on “comparative poverty”

The current edition of the Economist has an interesting “special report” on “the poor” that draws some comparisons between rural Kentucky and urban Democratic Republic of Congo as a study of “relative poverty”. I can’t help thinking that the article was mostly an excuse for a “Dukes of Hazzard” inspired visit to Hazard, Kentucky and I think the (uncredited, as is the policy of The Economist) author misses a couple of useful comparisons, but there’s other bits of the story that are quite useful. (Thanks to Danny Yee for pointing me to the story.)

The author interviews a disabled former truck driver in his early 60s who lives on a social security payment of $521 a month, and the head of emergency surgery at a Kinshasa hospital, who supplements his government salary of $250 a month with consultations with private patients to make about $700 a month. The Congolese doctor supports a household of 12 on his income, while the truck driver lives alone. (And anyone who’s lived an worked in Africa knows that the doctor is likely supporting an even larger network of friends and family with loans, money for school fees, etc.)

There’s a nod in the piece to the idea of “purchasing power parity”, a tool economists use to compare income in countries with radically different income levels. In personal terms, when I lived on $14,000 a year in Ghana (as I did in 1993 on a Fulbright scholarship), I was able to afford a nice apartment in Accra, eat out every night and drink absurd quantities of beer, while saving almost half the money US taxpayers paid me. On the same amount of money in the US, I’d have a hard time just paying rent and utilities, because local costs of living are so much higher.

To compare what $700 a month means in the DRC and Kentucky, you need to purchase a “basket of goods” (usually foodstuffs, fuel and rent) in both countries and adjust incomes for cost of living to get a fair comparison. In 1999 (the last statistics I happen to have on my laptop), the US GDP (gross domestic product – the total value of goods and services created) was $9.1 trillion. When adjusted in PPP terms, the GDP was $8.9 trillion, or $31,872 per capita. US GDP is adjused slightly down (96% of real dollars) because cost of living is slightly higher than the mean used by economists to calculate PPP.

DRC’s GDP in 1999 (a year where the country suffering from civil war and widespread corruption) was $5.6 billion (not trillion), and PPP GDP per capita was $38.6. In other words, DRC’s PPP adjustment is by a factor of almost 7 because cost of living is (necessarily) low. Even with this adjustment, GDP per capita in PPP terms in 1999 was $801… which means that, in real dollar terms, GDP per capita in DRC was about $116.

In other words, a PPP comparison of the Congolese doctor and the Appalachian truck driver (which the Economist doesn’t provide) is the comparison between $500.16 a month in the US and $4478.50 a month in the DRC, assuming 1999’s ratios hold true. (I’m sure they don’t, as DRC has recovered, somewhat, from 1999’s crisis state, but you go to blog with the statistics you have, not the statistics you wish you had.) It might be interesting to see a comparison between the Congolese surgeon and a doctor in rural America making $54,000 a year, for instance, or between the truck driver and a Congolese family living on $1200 a year in PPP terms.

There are two places where I think the Economist article misses the mark (other than not spelling out the PPP comparison more explicitly). The author suggests that impoverished Americans are more aware of their poverty than the Congolese because they’re comparing themselves to the wealthy in America:

For a Congolese peasant, there is no shame in living in a hut made of sticks. Everyone you know does too. In America, by contrast, the term “trailer” denotes more than a mobile home, and the people who live in one know it. They are also acutely aware of how richer folk live, because they watch so much television.

The Congolese are watching television, too – South African, European and American television. They’re comparing themselves to international standards and they’re increasingly cognisant that there are lots and lots of people in the world lucky enough not to live in “a hut made of sticks”. Comparatively wealthy Congolese are profoundly aware that people live better in Europe and North America, which helps explain why so many of them emigrate when the opportunity presents itself. There’s little doubt that the skilled surgeon profiled in this article could emigrate to the US with his skill set, as our country continues to produce fewer physicians than we need and import skilled professionals from abroad.

And that’s where I think the article misses a real opportunity. Rural Kentucky is one of the parts of the US that has a very hard time attracting and retaining physicians. The article notes that the truck driver is resentful of the South Asian physicians he encounters in local hospitals and worries they’re conspiring to give him the wrong medication. (Indeed, he threatens to “shoot them plumb between the eyes” if they do.) It’s easy to imagine the Congolese doctor emigrating to the US and being the object of the truck driver’s resentment. It would be useful, I think, to bring the article full circle by looking closely at the economic incentives the doctor has to come to the US, the damage to the Congolese medical system caused by widespread emigration, and the sorts of tensions comparatively wealthy doctors from the developing world experience living with comparatively poor patients in rural America. I’d be very interested in some interviews with the doctors and nurses who are living in Hazard, Kentucky, and sending large portions of their paychecks home to support their extended families.

But hey, the Economist fills 120 pages every week. They’ll get around to that article sometime soon, I suspect.

6 thoughts on “The Economist on “comparative poverty””

  1. Medicine is kind of a funny area, and there are lots of interesting issues around it. The medical system basically depends on this sort of emigration in order to bring medical knowledge from rich countries to poor countries. That seems to be why the apparent drain of expensively-trained doctors from Africa and India to Europe and from Europe and Asia to America is accepted to a large extent.

  2. Antoin – you’re right on, and you’re pointing to one of the great controversies surrounding developing world emigration. If Africa and South Asia’s best and brightest move to the US and Europe, get skills, send income home and return home in a decade or two, emigration is a powerful economic engine for the developing world. If they don’t come home, it’s a much more complicated and dangerous equation – you can end up with countries wholly drained of medical talent…

  3. I felt like that article did a pretty terrible job conveying poverty in America, and picked such a particular case, and not a particularly poor case. Most of America’s poor are urban poor. A huge portion of them aren’t white, even though they are citizens. Most don’t receive assistance, are working, and are afraid to go to the doctor. I’m not going to say being poor in America is worse that being poor in Africa, I’m not going to say that at all, but I will say it’s different. It breaks a completely different kind of person. Being poor in America often entails constant rent anxiety, temptation to cheap hard drugs, fear of illness, constant fear of violence, and mounting bills. Yes you have more money, but you have more things taking it as well. PPP figures rarely reflect regional variation in rent- the biggest pressure on American poor. I was annoyed at the author’s implication that there’s not starvation in America, because millions of people live with food insecurity here. Both the poor in Africa and in America know there’s a nicer life out there- Africans often think if they could just get to America it would be theirs, American poor often think it is simply unavailable to them, personally. The one thing I will say African poor almost always have on American poor is the reliability of family, for pooling money and re-alocating resources. There’s a lot less expectation of family assistance and support in America, and many people that would have been supported in another culture are allowed to slip through the cracks and wind up homeless or worse.

    Homelessness, and prison, in America- now that’s a misery that holds its own on the world stage. But it remains I hate these comparisons, done as if one group is more deserving than another, or one life is simply more unimaginable than another. So many of the stories of poverty are beyond the pale, and they are happening to real people. If this author really believes “if poor Americans were to compare their standard of living with what is normal elsewhere in the world, let alone in Congo, they would see they have little cause for discontent.” S/He needs to spend a little more time actually with the poor, watching how they get through their lives, and not just hanging out with their predisposed image of Kentucky white trash.

  4. I have done lots of work with the homeless and needy in america and am studying cross cultures to do so in other nations as well.

    From what I can tell, america lives with an expectation to be wealthy, to look a certain way etc. So their is a HUGE social issue to deal with. In other countries that wrestle wit poverty often times their surrounding community is going through the same thing… the comparison level tends to be less.

    Maybe I am wrong?

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