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Comment by andrewmutz | Hacker News Reader

This is an issue where there is widespread misunderstanding. Here is a great opinion piece about how the way news is reported contributes to this chronic misinformation:

http://www.nytimes.com/2015/10/01/opinion/nicholas-kristof-t...

"One survey found that two-thirds of Americans believed that the proportion of the world population living in extreme poverty has almost doubled over the last 20 years. Another 29 percent believed that the proportion had remained roughly the same.

"That’s 95 percent of Americans — who are utterly wrong. In fact, the proportion of the world’s population living in extreme poverty hasn’t doubled or remained the same. It has fallen by more than half..."

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That's because the experience for the American middle class has during this same period been wage stagnation coupled with inflation in food, energy, housing, medicine, and tuition. The American middle class finds it difficult to believe things are getting better around the world because for them it's been getting worse since about 1970.

Yes. And the two facts are not disconnected.

We are seeing global inequality fall to unprecedented lows. If you're in the top 5% (which the American middle class definitely is), then less inequality feels bad to you.

Global wages growth is quite high, it's just happening in places that need it way more than rich westerners do, as much as that sucks for rich westerners.

One of the biggest lags on wage growth for the bottom half of Americans is the fact that the rest of the world is now competing with them for jobs, and able to do so via price.

This won't last forever, because as those places get richer their wages go up, and "low wages" is their primary competitive advantage.

Some would argue that the two are linked... wealth from the middle classes being transferred to the extremely poor. The wealth of the rich doesn't seem to be shrinking.

Correct! Because of increased trade low skill workers in rich and poor countries more and more compete for the same work. This raises the value of low skilled workers in poor countries where their incomes gone way up but lowers their value in rich countries where their incomes have stagnated.

In my opinion this is a clearly a good thing as their are many more low skilled people in poor countries and they are much much poorer. So a few hundred million forego raises to lift more than a billion out of abject poverty. Seems like good deal.

> wage stagnation coupled with inflation in food, energy, housing, medicine, and tuition

Is that wage stagnation not adjusted for inflation?

The numbers I've seen are adjusted for inflation and show that real wages have been largely stagnant since the early 70s. There have been periods of modest gain, usually when the economy is absolutely roaring like the late 90s, but the general trend has been flat to downward. The lower you are on the totem pole the worse it's been: the upper middle has seen some gain, the middle none, and the lower middle has lost ground.

I'm also not sure that I fully believe the inflation numbers. It's not necessarily that I think they're fraudulent, but I don't think the methodology for calculating inflation has caught up with reality. The models I've seen assume inflation to be consistent across the economy, which may have been largely true in the 20th century but is true no longer.

The problem is that inflation since the early 2000s has been extremely uneven. We've had massive deflation in some areas, like manufactured goods. But necessities -- especially real estate, health care, and college tuition -- have almost hyper-inflated.

You can go without gadgets and toys but not without food and a place to live. We've had near-hyperinflation in necessities but it doesn't show in the stats because the stats average those numbers in with the deflationary numbers you get if you look at TV sets, appliances, and computers.

Real estate is utterly insane. I cannot even comprehend how it can possibly be so high. How can you have a market for real estate at these prices? Who's buying it and what parallel universe of limitless wealth do they come from?

I'm not talking about areas like the Bay Area, which has peculiar circumstances at work, or always-hot areas like Manhattan. There will always be "bubbles" of high prices vs. the rest of the market. If you look across the average of the market, real estate is crazy when compared to wages. I suppose it may be a function of historically cheap money causing larger home loans and jacking up prices, but it's essentially locked anyone out who isn't rich or willing to sign up for a crazy mortgage.

Some real estate is a positional good, which has the price set by how much money the richest people have.

There is no way around this. If everyone wants to live as close to (say) Times Square as possible, that land will be expensive.

But you don't have to enter that zero-sum rat race. There are lots of places to live that aren't the only places the very rich want to live. They still enjoy decent schools and low crime.

Some college education is positional, too. If you want "Ivy League Education" for your kid, well, there are just about as many slots as there were 30 years, but a lot more rich people, so the price will get bid up to infinity. Here the real shame is that the non-gold-star educational system is still getting more and more expensive, for many many reasons.

Interestingly, most of the Ivy League has incredibly generous financial aid packages, enough that most middle-income people pay zero. When I went to college, having had 2/3 of my tuition paid for by the college, I remarked that higher ed in elite universities was basically socialism subsidized by a very capitalist minority that was willing to pay any amount. Not a bad system, but it unfortunately only works at those institutions where rich people will enroll their kids at virtually any price.

Each of these markets is at the intersection of two or more inflationary forces.

Real estate and colleges are often positional goods - you can spend as much money as you can afford to live in a nicer house than your neighbor, or go to a better school than other job applicants.

Health care and college tuition are victim to increasing efficiency in making things like manufactured goods. If you're ambivalent between apple farming and practicing medicine, then the price of 2 hour doctor's visit is going to be approximately buyable with two hours of apple farming. And since apples per farmer is going up faster than apples per dollar, the cost of health care is going to increase over time relative to other goods.

College loans and mortgages are the debt society has decided it has to pay in order to fund retirement. There really isn't another way to save on a long enough timeframe for enough people (unless you're Norway, and you can just decide to sit on oil reserves). If you make things, they fall apart, become outdated, or require ongoing maintenance - either way, when society stops making them, they stop having them. They can trade these things for promises to make them later, which basically works.

>Real estate is utterly insane. I cannot even comprehend how it can possibly be so high. How can you have a market for real estate at these prices? Who's buying it and what parallel universe of limitless wealth do they come from?

From what I've read, the wealthy across the globe, especially from corrupt or unstable countries, are parking their money in stable Western real-estate. Some of it they proceed to rent out.

Anglo countries are particularly vulnerable since their real-estate taxation regimes hit buildings and improvements so heavily compared to raw land-value.

>If you look across the average of the market, real estate is crazy when compared to wages.

Is it? I've been looking at places that aren't the coast recently and was shocked to find how much house you can still get for $300K in most places.

What do middle-class people do with the rest of their money when they can buy a house with $300K?

Now look into the availability of jobs in those places, and into what those jobs pay.

They pay pretty well, especially because 28% of your pay won't be going towards rent or mortgage payments.

The job hunt is a little harder(going through it now), but not that much harder.

https://en.wikipedia.org/wiki/List_of_Metropolitan_Statistic...

There's lots of nice places in the top 50 of there that aren't crazy expensive.

Real estate might be expensive because interest rates are so low.

Wage stagnation would be expressed in constant (inflation-adjusted) dollars, but it's also quite possible that not all products are subject to the same rates of inlfation.

Energy, food, and housing costs have increased. Electronics, especially on a capabilities-based scale, have become profoundly less expensive, though when factored into the end-use impacts (communications, information, entertainment), the cost reductions are far less substantial.

Healthcare is another area in which exceptional inflation has lead to only modest improvements in overall outcomes, particularly life expectancy for those already receiving good results: white females and males. Much of the improvement in health outcomes in the US since 1970 has been focused on bringing minority populations' standard of care and health closer to that of privileged majority populations. Not that this isn't a good thing, but it's different from saying that the _overall_ improvements in delivery have been evenly distributed.

How to lie with statistics and all that.

There's also the conservative rhetoric of alarmism and pessimism, which supports cutting back and doing nothing.

Don't pretend the other side is blameless for this widespread misconception.

The liberal rhetoric that paints a picture of a world full of poor people being sacrificed so that the rich can buy more private jets also contributes.

I think another pertinent point would be that until currency existed poverty did not exist. Humans have managed to exist (and in many cases thrive) on this planet for at least hundreds of thousands of years, and by some accounts millions of years. Only the smallest fraction of that time has currency (and thus poverty) existed. Not that barter / exchange did not happen, but official fiat currency certainly didn't exist. And even if people possessed a commodity for trade, they didn't need to use it to survive.

I don't have numbers on it, but would love to know if any studies have been done. My hunch is that, at the lowest levels of income across the planet, actually "needing money" to survive probably hurts their livelihood more than it helps.

"until currency existed poverty did not exist" -> surely if your kids die of hunger, we can call that poverty?

There might be people who think reducing extreme poverty is more important than telling the truth about it. That is certainly the case with several other issues...

It is far from clear that such a course of action is effective. Decision-making is rarely improved by inaccurate information. The belief that global poverty is worsening could easily lead to the conclusion that the problem is intractable, or that our efforts to reduce poverty are not in fact effective; conversely, the belief that poverty is being reduced can lead to the conclusion that what we are doing is effective, and we should do more of it.

It's quite possible for organizations to maintain two sets of "truth", one known to senior management and used for decision-making, and one known to the public and used for influence.

However, you cannot fool all the people all the time. At least I find the credibility of money-collecting NGOs and GONGOs so much reduced that I prefer to give my money to ones that speak the truth to me, not just the inner circle.

Rational people can't improve decision-making ability by losing information, but irrational people can. For instance, I may be less likely to do the dishes if I'm keeping score and realize I do them much more than my roommate, but if I don't keep score, I might only consider whether or not they need to be done when making the decision.

Of course, you can't really justify such a thing if you're trying to make a rational argument.

Dishonest for a good cause, wonderful, they have now lost the high ground.

I'm not sure that there is a "high ground" for complicated issues like this. Everyone comes to the issue with preexisting opinions and will use measurement methods that conform to those opinions. So it is in a sense a reasonable shortcut to just ignore distractions like "truth".

That's just giving oneself an excuse for lying. "It's ok if I lie, because everyone else does it, even unconsciously".

Lying is one of the most insidious form of harm one can inflict on another human being - poisoning their ability to reason about the world. Lies add up, and also deal recursive damage - people spread them believing they've been told the truth, and spread inferences based on them.

Lies should never be treated lightly and excused with trivialities.

As I get older I realise how much of the world runs on bullshit. Not outright lying, but getting close to that end of the scale.

A baseball bat to the head is far more harmful than most lying.

A baseball bat to the head makes your head hurt for a while. Lying makes hundreds of thousands of people refuse to vaccinate, which puts millions in more danger of diseases. Lying makes people die from refusing cures that owrk and going for glorified sugar pills.

And I mean lies from both sides - from those who will sell you the sugar pill and from those who represent the medical world and by lying and bullshitting made it hard to trust it.

Lies are toxic and accumulates in society. In an increasingly complex world that depends on mutual trust between people and organizations, this is an existential threat. I think that what's most likely to end our civilization is not war or disease, but this bullshit 'the world runs on' spilling over and drowning us all.

I did say most lying, and you are choosing some pretty extreme examples to counter. I do agree with much of what you say though.

I agree that lots of lies will probably die out without causing direct harm, though honestly, IMO it's akin to most bullets shot in battle missing their targets. But people today have a habit of spraying lies on full-auto, and some of them (you don't know which ones) actually do hit something and start recursively propagating. Maybe if people had a much stronger reaction to being lied to, we could reduce the occurences of lying to only those cases where it doesn't matter in the long run.

I mean, look at the current state of science. At this point I think it's safe to assume that most (like 90%+ most) of recent soft science results is bullshit, and probably most of medical research is wrong too. And it all starts with some scientists fudging results, and then other believing them and building on wrong research. Pretty scary thing - it seems like we have so much, but in fact we have very little reliable results, and it's getting harder to tell the right from the wrong apart.

> A baseball bat to the head is far more harmful than most lying.

Only in the short term. In the long term, lies undermine your confidence, destroy your relationships, ruin your reputation, and can make you completely cynical about the world around you.

There's certainly a set of lies that each culture has deemed acceptable, but acceptable is not the same as harmless.

> I'm not sure that there is a "high ground" for complicated issues like this.

Well... yes, there is? In a situation where the facts are reasonably clear, such as this one, the "high ground" would be the one that's most in alignment with those facts.

Global poverty is both complicated, and isn't as bad as it used to be. There's no need to pick one or the other.

Other threads here are talking about "accounting tricks". Even if we could exclude that sort of thing, there are still questions of why press releases are issued, who issues them, when they are issued, etc. If politics are involved (and they are whenever taxes or donations come from one place and go to another) truth is a mirage.

My response to this is not to lie myself, or to myself... too often. b^) My response is to assume that everything I hear from everyone is bullshit, unless the source has obvious interests in telling the truth, and until I can confirm the story through other means. What choice do I have? I'm from Missouri.

Also it seems that many fans of "truth" have a hard time dealing with any truth that happens to be somewhat subtle.

Nah, systematic dishonesty is always detrimental in the long run. You should always make sure your lies are trivial.

Once you start lying, you have no way of knowing if your goal is even worth pursuing. You are creating an institution which will have the primary goal of perpetuating itself.

See also "The Iron Law Of Bureaucracy."

This is the left's main problem, they need more and more people on government assistance or they lose power.

I'd say the 95% of Americans were utterly right if you define poverty as "a standard of living which anyone raised in America would consider to be extreme poverty", as opposed to "below the income threshold of the latest World Bank redefinition", in which a person earning 10 cents per hour needs only the energy to work 90 hours per week to bootstrap their way out of extreme poverty...

No...

The point of the survey is that 95% of Americans thought things were getting worse or staying the same.

Regardless of what metric you are using, they are dead wrong. Things are getting much, much better. You are arguing about the specific definitions and qualifications of the terms. You are ignoring what the results of the survey are actually saying about the perception of Americans.

I'll ask you this: how many of the ~1.5 billion additional people living in the world compared with 20 years ago wouldn't be considered to be living in "extreme poverty" by US standards?

(I'll give you a hint: more than half the world's present population lives on less than $5 PPP per day, few of them by choice, and it's not the richer countries where the rapid population growth is happening)

If you think people earning as little as the equivalent $5 of US-equivalent purchasing power per day are extremely poor[1], that's more[2] people in extreme poverty than there were in the 1990s, despite all the incremental improvements to poor people's average incomes across the developing world and stark improvements in a few rapidly-industrialising regions.

Where you draw the line matters. And the survey, notably, didn't draw a line. I'm the last person to defend Americans' knowledge of world affairs, but their belief that poverty is actually getting worse in terms of absolute numbers of people subject to it is not unreasonable.

[1]which isn't exactly an unreasonable point of view for anyone used to earning more than that per hour even whilst on minimum wage, even if there's a lot of people in developing countries on that level of PPP-adjusted income that think they're doing pretty well compared with their neighbours. [2]edit: having had a play with the World Bank's model, it suggests that you end up with more people in poverty in 2012 than the early nineties if you set your threshold for extreme poverty somewhere between $5 and $6 per day of US purchasing power. The number of people below that threshold in sub-Saharan Africa - where much of the poverty relief narrative has focused - has almost doubled.

How could you spend so much effort typing all of that without even bothering to read what I just said? Or are you literally incapable of understanding how irrelevant what you are saying is to the point that is being made?

You keep talking about something completely different. The question wasn't based on the US standard and it didn't ask about absolute numbers. It asked about the proportion of people living in extreme poverty as defined by the WB, and their answers are completely wrong. And I don't think it's an American thing, ignorance about development issues is pretty widespread. Ask people how much they think the government spends on humanitarian/development aid and they'll say something like 25-30%, when it's about 0.18% of gdp in the US. But again it's not uniquely American. In the Netherlands they say ±6% when it's really about an order of magnitude less (just under 0.7%) for example, most people are unaware it's that low or that it has been lowered in recent years. Better yet though, the study that shows that only 5% of Americans knew the right answer was done in Sweden and Norway, too. While they do a bit better, not by much getting it right about 20% of the time, and wrong 80% of the time. (and as Hans Rosling would say, a monkey doing this test would be about 50% more accurate as an average Norwegian or Swede).

Now it's a fair point, we can argue about the definitions of income all day and change definitions and have different answers that may not be very meaningful, I agree with you there. But just look at one indicator of poverty which has much less ambiguity as a statistic: child mortality under five. Kids who die, there's not a lot of room to juggle with definitions or semantics here. It's caused by societies with deeply entrenched poverty, societies that due to their poverty struggle to provide adequate healthcare, food, clean drinking water, education to parents, safe living environments etc etc. And if we look at child mortality, it more than halved since 1990, despite a much bigger population. It's now around 16 thousand per day, an astonishing number, but think about what it means, it means compared to 1990, about 6 million people (a holocaust-scale parallel is easily made) do not die every single year, year after year, that did die in 1990. That's an insane achievement and it's contrary to our public sentiment that looks at Ebola and ISIS and thinks the world is on fire and on the decline, when it's never been better. There are many more of such statistics we can look at, and they're not all expressed in some definition of poverty that changes to suit our desires. We also measure poverty in things like literacy rates, in things like the proportion of the population that has access to a toilet, or electricity, or a loan. Across the board the improvements are substantial, obviously never good enough and perpetually unable to meet our desire to solve every problem yesterday, but in the context of enormous challenges the progress we're seeing on tons of development indicators is truly inspiring and optimistic.

The question asked didn't mention the World Bank or any other definition of poverty, at least not judging from the results presentation. The World Bank, incidentally, has multiple definitions of extreme poverty, although all of them are lower than reasonable industrialised-world thresholds.

When around half the world's population's weekly purchasing power is, according to official World Bank approved statistics, equivalent to the purchasing power an American obtains after a five hours work on federal minimum wage[1] I don't think that Americans are unjustified in not knowing the "correct" conclusion that numbers or proportions of people in extreme poverty have "nearly halved" in recent years. If you think the unspecified extreme poverty bracket ought to include the ~50% of the population still stuck at $5 per day, it would have been literally impossible for the proportion of people in that bracket to have already halved in recent years.

I'd have accepted that it might appear a bit ridiculous for them to think that extreme poverty had doubled - especially given that it is so pervasive - except... they could have been inferring it from a doubling of "extreme poverty" reported in some studies focusing on their own country[2]. I assume results of papers like this get more mainstream coverage in US media: http://npc.umich.edu/publications/policy_briefs/brief28/poli... So perhaps some Americans don't think the world extends beyond the boundaries of their country; perhaps as you suggest they guessed on a multiple choice question based on having seen lots of reports on epidemics and war in the news. As I said, I'm the last person to defend the wisdom of Americans or any other type of crowd. But frankly, it's no less ignorant to insist that everybody should know "extreme poverty has halved" when the basis for that "fact" is predicated on the assumption that people earning $1.30 a day no longer qualify as extremely poor, even if other factors like working conditions have got worse. They're certainly right not to take that stat at face value.

We know medicine and access to it is getting better and that's having effects in lives saved. We know some of the GDP per capita increases are trickling down, even though our methodology for estimating how that affects the base of the pyramid is necessarily imperfect. But I don't think we're anywhere near the level of confidence of sustained global reduction in absolute poverty - as opposed to amelioration of its most acute symptoms - to be in a position to start celebrating how few people are really poor, never mind criticising the public for not being aware of it.

Not when - I really can't stress this enough - most of the world's population still have to survive for a week on the notionally equivalent purchasing power of an American working less than a full day's shift at Walmart.[3] That proportion certainly hasn't "nearly halved" and it's really not stupid or ignorant to think that the label "extreme poverty" could still apply to all those people

[1]if you believe PPP calculations, which are inadequate for this sort of thing since the weighting basket tends to include luxuries and so doesn't account for how cheap food and living has to be in most of the developing world. But again I don't think the inadequacy of measurement detracts from my point about poverty statistics being very much open for debate. [2]using a different World Bank definition of extreme poverty. [3]It's not that there's no validity to arguments that these people aren't extremely poor; I just don't see any reason why the argument that some of them are not should form the basis for widely accepted "facts". I've met people on that level of income in developing countries I wouldn't consider extremely poor of course. Then again, I've also met people literally killing themselves to earn $10 a day who I wouldn't consider anything other than extremely poor, even after accounting for it being considered a good income locally. Adjusted income-based measures of poverty don't really have anything going for them other than relative convenience.

Notably, assuming the linked PDF report of the survey is correct, when asking the question they appear to not have given any supplemental information such as a definition of extreme poverty. Which means the only thing the survey is good for is measuring peoples perception of what will likely be a very nebulous concept for most of them (e.g. I have no idea how much essentials you could get for $1.9 a day if you were actually forced to be cautious)

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