LONDON (Realist English). A new study suggests that average poverty is significantly higher in the United States than in major European economies, despite higher overall income levels, according to research by Oxford University economist Olivier Sterck.
The study introduces a metric called “average poverty,” defined as the time required to earn $1 in international dollars — a measure adjusted for purchasing power parity. According to the findings, it takes about 63 minutes on average to earn $1 in the United States, compared with 26 minutes in Germany, 31 minutes in France, and 34 minutes in the United Kingdom.
The results indicate that average poverty in the United States is roughly twice as high as in these European countries, reflecting wider income disparities rather than lower overall wealth.
Sterck argues that traditional poverty lines fail to capture the full distribution of income. By measuring poverty as a continuous spectrum, the new approach highlights how inequality shapes economic outcomes across entire populations.
The findings come despite relatively strong macroeconomic indicators in the United States. In purchasing power terms, the U.S. economy remains among the strongest globally, and even its poorest state, Mississippi, has a GDP per capita close to that of Germany, Europe’s largest economy.
However, the study finds that inequality plays a decisive role. Since 1990, the time required to earn $1 in the United States has increased by about 20 minutes, or 47%, while it has declined in Germany, France and the UK. Over the same period, average incomes grew modestly across all four countries, but income inequality in the United States rose significantly faster.
According to Sterck, income dispersion is much greater in the U.S., meaning a larger share of the population earns relatively low incomes. This drives up the average time required to reach the $1 threshold.
Globally, the metric shows a different trend. Average poverty has declined by about 55% since 1990, with the time needed to earn $1 falling from roughly half a day to about five hours, reflecting rising incomes in developing economies.
Analytically, the study reinforces the argument that economic growth alone does not determine living standards, and that distributional factors can offset gains from higher average income.
The key implication is that without addressing inequality, advanced economies may continue to see rising effective poverty levels, even as headline economic indicators remain strong.