Economist Olivier Sterck, responding in The Conversation to Michael W. Green’s proposal to raise the poverty threshold to $140,000, argues, “there is no magic threshold below which you are poor and above which you’re doing fine”:

Instead, I propose a new way to measure poverty, through what I call “average poverty,” which reflects the fact that having less income is always worse than having more.

Average poverty builds on a simple intuition. If someone I’ll call Alex earns half as much as someone else I’ll call Barbara, then Barbara is twice as rich as Alex and Alex is twice as poor as Barbara. […]

This means that poverty can be defined as the inverse of income, and its unit is simply inverted. If incomes are measured in dollars per day, poverty is measured in days per dollar.

Average poverty therefore captures something very concrete: the average number of minutes, hours or days that it takes to get $1 in income.

Using this formulation, Sterck determines that the United States has a worse “average poverty” than other “high income” countries, taking longer to get to $1 in income (“earnings from work, government benefits and other sources of money […] averaged among all family members”):

• United States: 63 minutes on average to get $1 in income
• United Kingdom: 34 minutes
• France: less than 31 minutes
• Germany: about 26 minutes

This indicates that average poverty is substantially higher in the U.S., even though U.S. average incomes are higher than in most Western European countries. While average poverty declined over time in most other high-income countries, it has increased almost continuously in the U.S. since 1990 despite swift growth in average incomes.

The cause is income inequality, and a simple poverty line, regardless of where it’s set, masks America’s growing inequality.