Lies, damn lies, and statistics: European standards of living and poverty

I grow increasingly tired of people holding up Europe as the bright shining example of effective social programs.

Sure, we've got lots of problems here, but Europe--and the term depends on which nations you arbitrarily decide to include in the term Europe--is still struggling with immense and widespread problems of poverty and unequal income distribution that five decades or more of the welfare state, and nearly two decades since the fall of the Soviet Union have not been able to eradicate.

Polska, a Polish business site, takes its analysis of Gross Domestic Product per Capita one step further than those recent sensationalist reports about Great Britain's GDP (primarily on the strength of the fluctuation of the Pound) having slipped ahead of the US:

In 2005, the Gross National Income per capita (GNI, Polish: PNB) in Poland, according to the data of the World Bank, amounted to around 7 thousand USD. According to this criterion, Poland is much poorer than Germany or France, where, according to the same source, GNI in 2005 reached 34 thousand USD - but still richer that Turkey (4.750 USD) or Russia (4.460 USD).

But the standard of life depends also on the purchasing power of the money earned. As prices on the Polish market are, in most cases, lower than in the Western Europe, the GNI or the GDP (the difference between these two indices is small) not has to be modified with the purchasing power parity, to give a better understanding of the standard of life in Poland as compared to other European countries. Such a correction reveals that the standard of life in Poland is 49% of the EU average (see Table 7.1)

While I haven't been able to find these figures so calculated for 2006 or 2007, what's interesting is that a European standard of living is very much a geographically relative term.

Using the UE 25 rating as 100; here's how it breaks down (with Japan and the US thrown in for comparison):

Luxemburg = 251.7
Norway = 171.6
USA = 149.3
Ireland = 138.1
Iceland = 130
Switzerland = 127.5
Netherlands = 126.7
Austria = 123.6
Denmark = 121.4
Belgium = 118.2
UK = 115
Sweden = 114.5
Finland = 110
Germany = 110
Japan = 109.7
France = 109.7
Italy = 101.3
UE25 = 100
UE15 = 108.3
Eurozone = 106.6
Spain = 98.2
Cyprus = 89.9
Greece = 83.6
Slovenia = 71.4
Czech Republic = 74.2
Malta = 73.7
Portugal = 72.5
Hungary = 62.3
Estonia = 59.6
Lithuania = 51.5
Poland = 49
Latvia = 48.3
Croatia = 47.9
Bulgaria = 33.9
Romania = 33.1
Turkey = 27.4

These figures are quite volatile, by the way. The following countries actually showed declining purchasing power in 2005: Belgium, Denmark, France, Italy, Finland, Sweden, UK, and Turkey.

So there are really two Europes today: the West (composed of Norway, Ireland, Iceland, Switzerland, the Netherlands, Austria, Denmark, Belgium, UK, Sweden, Finland, Germany, France, Italy, and Spain) and the Rest (Cyprus, Greece, Slovenia, Czech Republic, Malta, Portugal, Hungary, Estonia, Lithuania, Poland, Latvia, Croatia, Bulgaria, Romania, and Turkey).

Yet even this doesn't scratch the surface. Despite the fantasies of American Liberals and Progressives, poverty remains a serious if not intractable problem in both Europes.

A little known fact: the two industrialized European nations with the highest poverty rates are the UK and Germany.

Here's what an OECD study discovered about Great Britain:

The country with the highest poverty rates—both static and over a six-year period—is the UK, followed by the US and Canada. Before benefit payments, 55 percent of the population of the UK fell below the poverty line at least once in a six-year period. After benefits the figure is just under 40 percent.

And as for Germany, here's an abstract of a recent major study on Library Index:

Although Germany is one of the largest economies in the world and was extraordinarily successful in recovering from the economic, infrastructural, and social disasters wrought by World War II and the Nazi Party's control, the country fell into economic stagnation in the early 2000s. By early 2005 the unemployment rate was the highest it had been since the 1930s, according to BBC News Online ("German Jobless Rate at New Record," March 1, 2005). In December 2005 the unemployment rate had dropped, from 12.6% to 11.2%, before rising again to 12.2% in February 2006. The country's weak economy caused not only joblessness but, increasingly, outright poverty, especially among families with children.

In September 2005 Sabine Dobel reported on Expatica.com ("Going without in Wealthy Germany") that more and more Germans—the poor, the elderly, children, and the disabled—are suffering from malnutrition as a result of unemployment and cutbacks in government aid. Incidences of middle-class people removing food from dumpsters for their own consumption are on the rise in German cities, according to Dobel. Perhaps most alarming are reports that as many as 20% to 30% of people admitted to hospitals in Germany are malnourished, particularly sick children....

As of March 2006, 16% of Germans lived below the nation's poverty line. Deutsche Welle reported in February 2006 ("Germany Serious about Minimum Wage," February 24, 2006) that two million poor Germans have full-time jobs. As of 2006 Germany did not have a minimum wage law—an issue that has stirred up a heated debate across the country. Other European Union countries have a minimum wage, but the idea instituting one in Germany has the nation split: many union leaders are calling for a high minimum wage, while others argue that this would result in the loss of more jobs.

The minimum wage issue is part of a larger controversy across the country regarding the government's proposed labor and social welfare reforms, known as Hartz IV. These reforms would increase the workweek from its traditional thirty-five hours with no pay increase. In addition, Germany's generous unemployment benefits would be strictly limited, and the power of labor unions would be curtailed. Proponents of the reforms argue that the long history of Germany's brand of capitalism—characterized by an extremely high level of social welfare programs—is over, and government guidance of economic markets must give way to an entirely free market system. Opponents of the reforms believe they will only increase the country's rapidly rising poverty rate.

Child poverty in Germany is an especially serious issue.

AgeTime Europe also finds a hidden problem--even among the most prosperous European nations--of the elderly in poverty:

In the early years of the 21st century, about 13 million elderly people are at risk of poverty in the 25 EU Member States, amounting to as many as one-in-six of all 74 million elderly people living in EU. Cyprus, Ireland, Spain, Portugal, Greece and the United Kingdom are identified as the countries with the highest poverty risk for the elderly population. The new Member States are largely countries with the lowest risk of elderly poverty. In terms of absolute numbers, the largest numbers of elderly at risk of being in poverty are found in five large member countries: the United Kingdom, Germany, Spain, Italy and France. About 9.8 million poor live in these five countries: thus about three out of four elderly at risk of being poor live in these five countries.

There is another hidden form of poverty in the richest countries of Western Europe--that of migrant laborers. The "guest workers" who do the dirty jobs in Europe (sometimes unprotected by minimum wage laws and rarely covered at all by the beneficent health care benefits reserved for their own citizens) live in a hazy shadow world that European politicians never want to discuss.

According to Innovations Report:

Migrants from outside the European Union are occasionally exposed to a multiple times higher risk of poverty than the “indigenous” population, according to the widely used Laeken indicator of poverty (with a threshold of 60% of national median income). EU and non-EU migrants constitute two rather distinct groups in most countries in terms of their exposure to poverty.

A potential cause for social tension, however, is relative disadvantage: in other words, the difference between poverty rates of migrants on the one hand, and of the indigenous population on the other. In the worse case, the situation of migrants is disadvantageous both in absolute and relative terms, characterised by both high poverty rates and relatively higher poverty rates than the “indigenous” population. Such countries include Belgium, France, Luxembourg, Finland and Sweden.

I'm still looking (so far, in vain) for the statistics that will tell me about total poverty in Western Europe, because almost all of the statistics leave out migrants.

Here's the point: our Progressive friends love to tell us about the benefits of the European model of social democracy. But they also love to cherry pick their data, and ignore such items as generally unreported migrant poverty, huge regional variations in wealth, poverty among the elderly in the wealthiest nations, the lack of a minimum wage in the heart of Europe, and growing concerns about childhood poverty there.

The "welfare-state capitalist" nations of Western Europe that we are so often advised to emulate have developed their own set of poverty-related problems that are as intractable as our own.