When it comes to human welfare, it’s not income as such that matters. It’s what that income can buy, in terms of access to the things we need to live well. It’s the ‘welfare purchasing power’ of income that counts. Trying to run a household on $30,000 in the United States would be a struggle. You can forget sending your kids to a decent university. But the exact same income in Finland, where people enjoy universal healthcare and education and rent controls, would feel luxurious.
