A new method of measuring poverty suggests that the United States is falling behind major European economies, despite having higher average incomes. The research, developed by an Oxford University economist, introduces a concept called “average poverty,” which measures the time required to earn $1 in international dollar terms. The findings highlight growing inequality in the US and reveal a different perspective on economic well-being.
According to the study, it takes approximately 63 minutes to earn $1 in the United States. In comparison, the average time is significantly lower in European countries — 26 minutes in Germany, 31 minutes in France, and 34 minutes in the United Kingdom.
These figures indicate that average poverty in the US is nearly double that of these major European economies.
The study explains that traditional poverty metrics often fail to capture the full picture, particularly the role of income distribution. By focusing on time rather than income thresholds, the new approach provides a broader and more inclusive understanding of economic hardship.
Despite strong economic growth and higher GDP per capita, the US continues to experience rising inequality. Over the past three decades, the time required to earn $1 in the country has increased by nearly 20 minutes, reflecting a 47% rise in average poverty.
In contrast, European nations have seen steady improvements. While incomes have grown at a similar pace across both regions, inequality has remained relatively stable in countries like Germany, France, and the UK, allowing economic growth to translate into reduced poverty levels.
The findings also reveal that income distribution in the US is far more uneven. The gap between high and low earners is significantly wider, leading to a larger share of the population experiencing lower income levels.
Globally, however, the study notes a positive trend. Average poverty has declined by more than half since 1990, with the time needed to earn $1 dropping from around half a day to approximately five hours.
The research underscores a key economic insight: a growing economy does not always guarantee reduced poverty. When inequality rises faster than income growth, the overall level of poverty can increase, even in wealthier nations.
