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I did the same math. The closest guess I have is that it is derived from the poverty line for a family of four, $32150 (which divided by four is $8037).

That's because it is the average of the "time to earn 1$" per individual.

So let's say you're Elon Musk and it takes you a negligible enough time to do this that we can say that t_Elon = 0.

Now say you are way below the poverty line and earn 6000$/year. This means t_Poor = 87 mins.

If we average 80 t_Poor and 20 t_Elon we find we get 0.8 x 87 mins = 67 mins. Even when the average income in this case would be 0.2 x income_Elon. Something like 7 billion $/year.

I hope this shows why you can't just take the inverse to get the average income. The only way that was true was if everyone earned the exact same income.

Why is this a better metric?

The average income is biased towards big earners, while this metric is more centered around the mode of the distribution (poor people).

It captures the income distribution much better than average income.

> In particular it seems weird that only we had a massive change during COVID.

It is not weird if you were old enough to be aware of the news during that time. Poor people in the US suddenly coming into money and being lifted out of poverty thanks to COVID stimulus checks was front and center in the news cycle as it was happening. The other countries noted did not follow the same "hand out free money" approach. Their safety nets were built around maintaining continuity during COVID.

I wonder if there’s also some difficulty in translation happening due to adding up inverted numbers for example 1/(a+b+c+…) != 1/a+1/b+1/c+…

You forget that in the US, even with PPP, the level of "comfortable" is higher, due to missing social safety nets.

This means using PPP doesn't actually show where the level of precarity is.

From a linked article:

>For these purposes, income includes earnings from work, government benefits and other sources of money, and it is averaged among all family members.

Yes, it is supposed to include income from all sources.

https://theconversation.com/measuring-poverty-on-a-spectrum-...

I don't think that's quite right, it would be the average of the inverse hourly wage not the inverse of the average hourly wage.

    >>> import statistics
    >>> 1/statistics.mean([10,30,100])
    0.02142857142857143
    >>> statistics.mean([1/10, 1/30, 1/100])
    0.04777777777777778

No, it's

average poverty ≝ average(1 / annual income)

Inversely proportional to the harmonic mean of average yearly income.

It is not intuitive at all to me. From the article, I can see that there's some sort of penalty by having more billionaires in the country, and that somehow leads to "the time needed to earn $1 is 63 minutes in the US", which doesn't really line up with the fact that minimum wage per hour ranges from $7-$18 depending on the state.

The "old" way was to measure median net PPP per capita, which makes more sense to me:

https://upload.wikimedia.org/wikipedia/commons/8/85/Annual_m...

Being at the bottom of that list is very desirable, because it means high quality of life, while being at the top of that list means very low quality of life.

The goal of increasing work productivity must be to produce the same by working less, not to work the same in order to make higher profits for a negligible part of the society.

See my comment elsewhere in this thread: https://news.ycombinator.com/item?id=47605141

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.

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

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.

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.

Cost of living and cost of goods sounds ludicrous from outside. Like rents and car payments, and insurance. And even stuff like some restaurants... Ofc, there is expensive locations outside but there is also lot more reasonable places. From outside it feels that there is something especially broken in cost wise in USA.

Nope, I just spent 15 minutes reading the original paper and can’t make any sense of what he is calculating.

International dollars are normalized to USD, so there’s no conversion necessary. The figure he quotes of 63 min per dollar converts to $8343/year. However, his original paper states that he created this measure by inverting income, so the number 8343 is his starting point.

The closest guess I have is that is derived from the poverty line for a family of four, $32150 (which divided by four is $8037).

If that is the case, what he is really doing is comparing poverty line definitions between countries.

You can't compare calculations in article with minimum wage.

Think of it this way, its like difference between median and average income. Larger inequality, larger the gap between median and average.

>The “time” refers to a day of life for anyone, at any age and in any circumstance — not just the hours worked by someone with a job.

So it's how much you earn per day divided by 24, or maybe by yearly earnings and hours per year

Great intro that quickly explains the reasoning for the proposed new measure:

> Virtually everyone would agree that a 20-meter tree is twice as tall as a 10-meter tree. Conversely, everyone would agree that the 10-meter tree is twice as short as the 20-meter tree. There is no threshold or “shortness line” above or under which these relationships cease to hold: a 5-meter tree is twice as short as a 10-meter tree, a 1-meter tree is twice as short as a 2-meter tree, and so on. This reasoning remains valid when considering other multiples: a 1-meter tree is three times shorter than a 3-meter tree. To be sure, when assessing the height of a single tree, different people may disagree whether it is short or tall, as their judgment will depend on the benchmark they use for their assessment. However, when comparing two different trees, virtually everyone would make similar cardinal comparisons. In mathematical terms, shortness is the reciprocal of tallness. [...] In this paper, I apply the same logic to define a new poverty measure

Can you elaborate the obvious nonsense?

They compared purchasing power for an actual apples to apples comparison. Did you even read the article, or just look at the graph without context?