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Comment by ktoyame | Hacker News Reader

it feels counterintuitive to me that US "average poverty" dropped more than 50 percent in covid, while european stayed absolutely untouched.

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I felt the same. But I think the reason is similar to how your fuel economy is absolutely destroyed by sitting still. When you average in a speed of zero the calculation goes haywire.

People in the US are so close to financial disaster that in order to avert disaster the US had to heavily subsidize those out of work. Many people got healthcare and unemployment benefits that would not have been otherwise available. This meant money for zero hours of work. When you average in $1/0 hours it does crazy things to the graph.

The reality is: During Covid the US rapidly adopted similar safety nets to EU countries and, in effect, aligned with their levels of poverty. Once the emergency measures ended we snapped back to our previous, precarious, poverty level.

Just my theory.

How much of that could be the lack of real social nets in the US compared to Europe?

In addition, anecdotally, everyone I know in the EU that had a job pre covid has a job today. I can't say the same thing about folks in the US.

The curious data point is that on this graph poverty seems to have strongly reduced during covid. Less poor.

Why does this surprise you? There were large, direct transfers to initially children, then everyone. This was the largest and most effective American anti-poverty program of all time.

Huge amounts of cash were given to many Americans during Covid.

That's not my experience in Finland. The unemployment rate passed 10% a few months ago. Youth unemployment is now over 20%.

Of course, this is due to the current Finnish govt. weakening its welfare system, driving down demand and creating incentive traps.

I.e. making the economy more like the US.

No, the current austerity measures are due to the national debt crisis in 2023, before the last parliamentary election. Even Yle acknowledged this beforehand.

https://yle.fi/a/74-20007883

https://yle.fi/a/74-20017437

I did not even mention the causes of austerity measures, I'm simply describing their effect.

You are not even responding to anything in my post. Please try again.

You're blaming the "current" Finnish government for austerity measures and implicitly removing blame from the previous administration for driving up the debt in the first place. I would just blame "the Finnish government" (over all administrations).

Uh, no. The unemployment is due to this govt. The austerity measures have led to purchasing power dwindling, leading to lowering domestic demand, and changes to unemployment, removing the possibility to do part-time work while on benefits has disincentivized people from becoming employed.

These austerity measures have made the Finnish welfare system more U.S.-like. This is all I'm commenting on. My initial comment did not assign blame, it simply described the situation.

The debt issue is separate from this point, since we're not talking about why these measures were made. But the debt is definitely not due to the previous govt. If you look at the data, the debt has been an issue since 2008 (just as it has been worldwide).

It is not counterintuitive at all, unless you misunderstand the income levels of the poor. Sending everyone $1400 massively increased the income of the poorest Americans.

Politicians are judged by these metrics, so they all get gamed.

They are not, sadly. Or rather, many voters care about many different things and the resulting metric is not that sensible.

Different responses to the COIVD shutdowns. The US government gave stimulus money directly to the people, for many bringing an increase to one's income during that period. The European response was focused more on helping people keep their jobs so their incomes remained stable.

Extremely doubtful that the stimmy was enough to meaningfully reduce the real poverty level. The people who already live paycheck to paycheck spent that almost as soon as they got it (hopefully on something that meaningfully improved their lives, like deferred car or home repairs, but if we're being real a lot of people blew it on gambling apps.)

The metric in question measures how much time it takes to get $1 in income. When, over a set period of time, your income increases (in this case because the government started paying you more than you were getting before), the time to get $1 goes down. When the government stops paying and you go back to the way things were then the time to get $1 goes back up.

Incorrect.

https://www.nationalacademies.org/news/federal-tax-credits-i...

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