Poverty, American Style

The Census Bureau tells us that more than 30 million Americans are living in poverty. This is routinely denounced by liberals, and sometimes even by conservatives, as a great moral scandal. However, hardly anyone knows what living conditions are characterized, these days, as poor. Robert Rector and Rachel Sheffield of the Heritage Foundation point out that in 21st century America, most “poverty” is what would until very recently have been considered “wealth.”

This is partly because the Census Bureau grossly undercounts the financial resources available to poor families:

[T]he Census report massively undercounts the economic resources provided to poor people. The Census asserts that a household is poor if its “money income” falls below a specified threshold. In 2009, the poverty income threshold for a family of four was $21,756. However, in counting the money income of households, the Census ignores virtually the entire welfare state. For example, there are over 70 means-tested welfare programs that provide cash, food, housing, medical care, and social services to poor and low-income persons. Major means-tested welfare programs include Temporary Assistance for Needy Families; Supplemental Security Income; the Earned Income Tax Credit; food stamps; the Women, Infants, and Children food program; public housing; and Medicaid. (Social Security and Medicare are not means-tested welfare programs.)

In 2008, federal and state governments spent $714 billion on means-tested welfare programs, but the Census counted only about 4 percent of this as “money income” for purposes of determining whether a household was poor. The bottom line is that the economic resources available to poor persons are vastly greater than the Census claims.

The lifestyle of the average “poor” person in America is astonishingly comfortable by any normal standard:

As scholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.”[3] In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation.[4] In the kitchen, the household had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker.

The home of the typical poor family was not overcrowded and was in good repair. In fact, the typical poor American had more living space than the average European. The typical poor American family was also able to obtain medical care when needed. By its own report, the typical family was not hungry and had sufficient funds during the past year to meet all essential needs.

This is not, of course, the image that John Edwards and his cynical political heirs try to portray. The amenities available to the typical poor American household are remarkable:

Poor families with children have more conveniences and amenities than other poor families. In 2005, the median amenity score for poor families with children was 16. We examined all poor families with children with an amenity score of 16 to determine which items appeared most frequently in these homes.

* These homes typically had both air conditioning and a personal computer.

* For entertainment, they typically had cable or satellite TV, three color televisions, a DVD player, a VCR, and a video game system, such as an Xbox or Play Station.

* In the kitchen, they had a refrigerator, a stove and oven, a microwave, and an automatic coffee maker.
Other amenities included a cell phone, a cordless phone, and a clothes washer.[17]

These conveniences may be considered representative of the living standards of the median or typical poor family with children in 2005.

It is obvious that the general improvement in living standards that has taken place in the United States over the last generation has enormously benefited our poorest citizens. Yet, by defining the “poor” as those Americans who have the lowest cash incomes, liberals take all improvements in living standards out of the equation.

Most cynical of all, perhaps, is Barack Obama, who intends to implement a new definition of poverty, under which that condition can never be eliminated, no matter how well, materially speaking, “poor” people live:

There is a vast gap between poverty as understood by the American public and poverty as currently measured by the government. Sadly, President Barack Obama plans to make this situation worse by creating a new “poverty” measure that deliberately severs all connection between “poverty” and actual deprivation. This new measure will serve as a propaganda tool in Obama’s endless quest to “spread the wealth” and will eventually displace the current poverty measure.
Under the new measure, a family will be judged poor if its income falls below certain specified income thresholds or standards. There is nothing new in this, but unlike the current poverty income standards, the new income thresholds will have a built-in escalator clause. They will rise automatically in direct proportion to any rise in the living standards of the average American.

The current poverty measure counts (albeit inaccurately) absolute purchasing power (how much meat and potatoes a person can buy). The new measure will count comparative purchasing power (how much meat and potatoes a person can buy relative to other people). As the nation becomes wealthier, the poverty standards will increase in proportion. In other words, Obama will employ a statistical trick to give a new meaning to the saying that “the poor will always be with you.”

The new poverty measure will produce very odd results. For example, if the real income of every single American were to triple magically overnight, the new poverty measure would show no drop in poverty because the poverty income standards would also triple. Under the Obama system, poverty can be reduced only if the incomes of the “poor” are rising faster than the incomes of everyone else. Another paradox of the new poverty measure is that countries such as Bangladesh and Albania will have lower poverty rates than the U.S.—even though the actual living conditions in those countries are extremely low—simply because they have narrower distribution of incomes, albeit very low incomes.

According to Obama’s measure, economic growth has no impact on poverty. Since the beginning of the 20th century, the incomes of nearly all Americans have increased sevenfold after adjusting for inflation. However, from Obama’s perspective, this increase in real incomes had no effect on poverty because the incomes of those at the bottom of the income distribution did not rise faster than the incomes of those in the middle.

In plain English, Obama’s new poverty-measure system will measure income “inequality,” not “poverty.” But he cannot call it an inequality index because the American voter is unwilling to support massive welfare increases, soaring deficits, and tax increases just to equalize incomes. However, if the goal of income leveling is camouflaged as a desperate struggle against poverty, malnutrition, hunger, and dire deprivation, then the political prospects improve.

The new measure is a public relations Trojan horse, smuggling in a “spread-the-wealth” agenda under the ruse of fighting significant material deprivation—a condition that is already rare in American society.

I am reminded of Dinesh D’Souza’s anecdote about a friend from India who told him that he was emigrating to America. When Dinesh asked why, his friend said, “I want to live in a country where the poor people are fat.”

In contemporary America, poverty is not so much a material condition as a spiritual one, often characterized by drug abuse, alcoholism, mental illness and illegitimacy. Until voters have a better understanding of what today’s poverty is and is not, it will not be possible to craft effective solutions to the very real problems–mostly behavioral–that afflict a significant portion of our population.

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