Friday, September 17, 2010
Yesterday we noted the record absolute numbers of Americans now living below the official poverty line. The post drew a number of astute comments, including this one:
No matter how good their standard of living is, brings up a good point, Americans below our Federal Poverty level have a much higher standard of living than the average EU citizen.
I am not sure that is entirely true, but it is not false, either. Because I love you, my readers, herewith a relevant and lovingly typed excerpt from Michael Medved's excellent book The 5 Big Lies About American Business: Combating Smears Against the Free-Market Economy, which I read on the plane home yesterday.
By focusing almost exclusively on the disparity between those who earn most and those who earn least, rather than reporting on the remarkable progress in income and living standards for even the poorest among us, major media distort and exaggerate the problems of poverty and inequality. David R. Henderson of the Hoover Institution of Stanford University suggests that "because of the problems with measuring income and adjusting for inflation, there's a better way to measure the wellbeing of a household: see what's in the house."
Robert Rector of the Heritage Foundation did just that in an important paper in August 2007, using detailed and authoritative government figures. According to this research, among the 37 million Americans officially classified as living below the poverty line, 97 percent own color televisions, more than 50 percent own two or more color TVs, 78 percent have a VCR or a DVD player, and 62 percent receive cable or satellite TV reception. Eighty percent of poor households boast air-conditioning, 89 percent have microwave ovens, and nearly three-quarters own a car. An impressive 31 percent have two or more cars.
Most surprisingly, 43 percent of all poor households actually own their own homes, and the average home owned by households classified as poor by the Census Bureau is a three-bedroom house with one and a half baths, a garage, and a porch or patio. Even considering poor people who rent apartments, or live with extended family, the average poor American enjoys more living space than the average middle-class individual in Paris, London, Vienna, Athens, and other European cities.
The old stereotype of poor kids going hungry no longer applies to the United States. As Rector reports, "The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases, is well above recommended norms.... Eighty-nine percent of the poor report their families have 'enough food to eat, while only 2 percent say they 'often' don't get enough to eat."
The numbers show that today's poor not only enjoy a vastly better living standard than the poor of previous generations, they actually enjoy more comfortable lives than the middle class of some thirty years ago. The Federal Reserve of Dallas used Census Bureau numbers to compare poor households in 2005 with "all households" in 1970, and the poor households of today are more likely to own washing machines, clothes dryers, dishwashers, refrigerators, stoves, color TVs, telephones, and air conditions -- not to mention recently invented conveniences like DVD players and cell phones. In other words, by simple, homey measures of comfort and convenience, the lowest rung on the income ladder lives better lives today than the average middle-class Americans of the last generation. More significant measures show substantial expansions in opportunities for struggling families: while children of poor households face far more challenges in attending college than children of affluent parents, they still manage to do so in greater numbers and percentages than typical middle-class Americans of thirty years ago.
What makes these achievements particularly impressive is the high percentage of the nation's poor who constitute new arrivals to this country. According to Census Bureau figures, a full one-quarter of all poor persons in the United States are now immigrants or the first-generation minor children of those immigrants. Approximately one in ten among the poor (or nearly four million individuals) is either an illegal immigrant or the under-eighteen child of that illegal.
Nothing more dramatically illustrates the prodigious ability of the U.S. economy to generate and spread wealth than the rewards and opportunities earned by those classified as poor -- especially when such a substantial proportion of those in that category entered the nation recently, and often without authorization.
Of course, Medved's data are a bit dated -- there are now more than 43 million people living below the poverty line, and many of them have lost their homes in the mortgage mess. I suspect that if the statistics above were updated to the conditions that prevail today, a smaller percentage would own their own homes, a smaller percentage would be illegal aliens, but a larger percentage would own the other erstwhile luxuries that were much less common in 1970.
In any case, who among putatively compassionate liberals will give Wal-Mart and its manufacturing partners in China the credit for this massive improvement in the material comfort of America's poor? After all, appliances and devices and clothing and just about anything else the poor might need other than food are manifestly less expensive, often by an order of magnitude in real dollars, precisely because we have outsourced the metal-banging work to Asia.
One more statistic that should be mulled is to look at the Obesity rate of our poorest citizens versus all the other groups. It is disproportionately high; so from a caloric in-take, albeit questionable choices, we are not faced with the same issues as we did in generations past.
My view is that the poverty line is a statistical gimmick. It serves the political interests of Republicans to define it down and the political interests of the Democrats to define it up. As you note, poverty has many manifestations. Take two people at random from below the line and it's even money that one will find the outlook for the future better than the days of the past. Take two people at random from above the line and it is even money that one feels impoverished in some way.
The poverty line snapshot also masks the turbulence of people going downhill and uphill with only a third or so staying put.
That said, it is clear that more people these days are not working, or working less, or working for less. All piles have a bottom. If you ask me what is more important, wealth or justice, I'd say there is no justice without wealth because there is no justice without opportunity and there is no opportunity without wealth.
Interesting. I would say wealth and justice are completely unrelated (unless one is bribing cops, judges, etc).
But, to disagree where we might have some common ground, there is plenty of opportunity without wealth. Generations upon generations of immigrants have come to the US with little or no wealth and, by assimilating and working hard, have created wealth.
Note as well that the federal measurement of "poverty" includes only cash income - it does not include any of the transfer payments available via federal, state and local government, as well as excluding the earned income credit and refundable tax credits.
There will always be a bottom quintile. By definition. That quintile doesn't necessarily mean that folks are going without shelter or are going hungry or are living without creature comforts that the rest of us enjoy.
I think poverty should be not be defined by income relative to the average, but by actual hunger or thirst. How many Americans are seriously short of drinking water, for instance?
From Dinesh D'Souza: What's So Great About America:
Recently I asked an acquaintance in Bombay why he has been trying so hard to relocate to America. He replied, “I really want to move to a country where the poor people are fat.”
Say no more.
I won't argue with the general theme (here and in earlier posts) that a poor American today may be better off than a poor American of 20 or 30 years ago in some respects or than a poor non-American (Africa and India, there is simply no comparison of living conditions), 22K per year for a family of four is not an easy existence, even if they have a TV. The "reality" TV shows that one can watch probably look like the good life. That should tell you something.
So let's not congratulate ourselves too much. We can do a lot better. But, I agree, good business is the answer, not more government, except to step out of the way of the former.
22k/year for a family of four isn't the same in, oh, a northern Cali farming area as it is in, say, San Fran.
I'm still amazed at the stuff that the "poor" kids at my Washington school considered a bare necessity that the rich ones in my NoCal school considered an amazing luxury. (A spare car, cable, internet, a computer, two TVs, new bikes every few years, brand clothing, refusing hand-me-downs....)
This is poverty.
I would consider safety to be a greater need than food, clothing, heat, and basic shelter for the poor. It's still dangerous to live in poor neighborhoods.
The impression of poverty, the idea of relative poverty, keeps people in bondage. They believe they have no fair shot, that only outside help can bring them up from slavery. I don't have a simple solution for that poverty. I do note that some of the things we have done to eliminate the absolute type of poverty may have contributed the growth of relative poverty.
Generally, I agree with your point on poverty.
I think it is worth noting, however, that we shouldn't be looking at what is in the house, exactly.
So many Americans live with huge consumer debt, possibly mortgage debt, etc. We should look at what is in the house that is paid for, and whether or not the house itself is paid for.
It matters little what material stuff is present if it is only weeks away from repossession, foreclosure, or the like. Americans need to face up to the fact that we are living above our means. That doesn't make us wealthy. In fact, it means the contrary.
Thinking about poverty struck folks who own a house is a pretty good indication that we're looking at too high of a level for "poverty."
Found this again. It's from '04, but eh.
(Full disclosure: my family of five lived in a three-bed one bath house, converting the pantry/shed into a master bedroom; two cars, internet, sat. TV and had to fight like crazy to keep the school from subsidizing our lunches. There's a LOT of money to be made in classifying folks as poor, if they are or not.)