So, in this module of the course,
we've been talking about comparative social welfare between the OECD countries,
the developed nations of the world,
and particularly between a group of European nations
that have roughly the same kind of income as the US,
and comparing that to US.
So far, we've looked at education and we've looked at healthcare.
This time, we're going to be looking at how we manage income and what are
the distributions of the way we handle income across this discussion.
So, I'm going to start you with a poverty slide here.
In this poverty slide,
you will see that it's the percentage of people in poverty after the social,
the tax and transfer system,
after government has stepped in.
You'll see that France has just over eight percent of its people in poverty,
Germany has just over 10 percent,
Poland and the United Kingdom are just over 11 percent,
Canada is just over 14 percent,
between 14 and 15 percent and the US is just about 18 percent.
So, in this chart,
we see that amongst OECD nations,
the United States policy choices result in us having
higher levels of poverty in almost all the OECD nations.
So, this is a significant difference in the way the US handles its social welfare regime.
So, the second slide is looking specifically at child poverty.
Here, we see that Germany has about 12 percent, 11.5, 12 percent.
France is about the same.
England's a little higher,
maybe just exactly at 12 percent,.
Poland is at something like 13.5 percent.
Canada is at just over 17 percent,
and the United States is at 22 percent.
Again, the United States here,
with the exception of Chile, Spain,
Israel and Turkey, tolerate
much higher levels of child poverty than do our comparable nations.
One of the reasons we're particularly concerned about child poverty is
that the conditions in which a child rose has long-term effects,
childhood nutrition, childhood trauma,
child access to education,
access to healthcare, all of these things
can have long term effects on the well being of children.
So, we've talked in the last two slides about one measure of income,
which is poverty and now we're moving to a measure of income, which is inequality.
So, how do we distribute income between the poorest and the wealthiest.
The measure that we use here is something called the Gini coefficient.
So, the Gini coefficient is a way of thinking about how we spread out our income.
So, it starts by lining up the population from the poorest to the richest,
kind of like you did in grade school when you lined up kids from the
shortest to the tallest and then,
you create an average
of how much of the income is going to the poorest and how much is going to the richest.
That is what we calculate as the Gini coefficient.
So, if an equal amount of income is going to everyone,
the Gini coefficient would be zero.
If one person received all the income and no one else got any income at all,
the Gini coefficient would be one.
So, you can see here that we've got a chart that goes from 0-45,
and the differences here are between 0.25 and about 0.45.
So, the range of difference we see in the OECD countries is here.
So, if we come back to the countries we've been talking about,
Poland and Germany are roughly the same at 2.9,
France is slightly higher at 2.95,
Canada is higher again at 3.32,
and England and the UK is at 0.35.
The United States is at 0.39.
So, Turkey, Chile and Mexico have
more extreme income inequality than does the United States.
But otherwise, all the other OECD countries choose using
tax policies and transfer policies to have less inequality than the United States does.
So, we're going to talk more in the course about why this would be,
but basically, there's a policy choices that are
built around the notion of limited government,
around the idea of self sufficiency,
around the idea of individualism,
which the United States embraces at
a much deeper level than do most of our comparable nations.
John RobertsonPolicy Lecturer
