August 29, 2007
Povery Rate Plunges, but....
According to the Census Bureau--and incoherent indicators aside--the U.S. Poverty rate has decreased significantly. Good news, right? Well, for some...
Elizabeth Burke Bryant, executive director of Rhode Island Kids Count, was quick to hail the findings as “good news for Rhode Island families.”....but not others:
Still, Kate Brewster, executive director of the Poverty Institute at Rhode Island College, called the Rhode Island numbers “unacceptably high” and said they “don’t tell the whole story.”And neither could miss the chance to, well, advocate:“The reality is that the federal definition of poverty is an inadequate measure of the number of Rhode Islanders who are unable to meet their basic needs,” Brewster said. She said the average rent for a two-bedroom apartment in Rhode Island — $965 a month — would eat up nearly 60 percent of the income of a family of four living at the poverty level — $20,650 for a family of that size.
Advocates used the data to bolster their calls to beef up state assistance programs for low-income residents.Cold, hard reality, enter Stage Right:“Rhode Island is clearly making progress,” said Burke Bryant of Kids Count. “We must continue to invest in quality childcare, early education and affordable health care for low-income families.”
Burke Bryant and Brewster praised Governor Carcieri and the General Assembly for increasing financing of adult-education and job-training programs, but criticized cuts to the childcare assistance program for low-income working parents. “Government work-support programs are a lifeline to making ends meet,” Brewster said.
Carcieri spokesman Jeff Neal echoed their support for adult education, but warned that the state’s bleak fiscal prognosis may preclude expanding social-service programs, or even avoiding further cuts. With a projected deficit in the neighborhood of $300 million if the state does not cut spending or raise taxes, the governor has already begun talks with his department heads about how to close that gap.OK, no surprises. But Robert Rector at Heritage has studied the data and reminds us that "poverty" is a little different in the U.S. of A. then the rest of the world:“Unfortunately, the state is facing yet another very difficult budget year,” Neal said. “Our primary challenge is to find ways to reduce state spending while continuing to protect our most vulnerable citizens.”
For most Americans, the word "poverty" suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 37 million persons classified as "poor" by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.With regards to children, Rector concludes:
...The typical American defined as "poor" by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.
The main causes of child poverty in the United States are low levels of parental work, high numbers of single-parent families, and low skill levels of incoming immigrants. By increasing work and marriage, reducing illegal immigration, and by improving the skill level of future legal immigrants, our nation can, over time, virtually eliminate remaining child poverty.Additionally, Rector doesn't think welfare reform has gone far enough and notes that there are no work requirements for recipients of food stamps and public housing and that "the welfare system continues to encourage idle dependence rather than work and to reward single parenthood while penalizing marriage."
Brewster et al would have us continue to raise the amount we spend on child-care assistance programs because, they say, that is the only way that single-parents can afford to go to work. Perhaps. But for families with two parents another solution is the one followed by my parents and, I'm sure, millions of others: work more, and work in different shifts so that one parent is always home with the kids. That's nothing new, folks. But it's hard, which I fully recognize.
And that's what makes falling back on the government such and easy, and insidious, "temporary solution." It de-motivates and fosters an unhealthy reliability that leaves people in the lurch when programs they depend on get cut, whether because of a politician's whim or for because of government fiscal problems.
"The main causes of child poverty in the United States are low levels of parental work, high numbers of single-parent families"
... the condition we created over the last forty years by our charity ... er, social programs.
Posted by: SusanD at August 29, 2007 5:18 PMFrom the offices of Minitrue and Miniplenty:
Attention proles,
All is well. Consume. Have confidence in your fiat currency. Be afraid. Obey.
Posted by: PDM at August 29, 2007 6:33 PMHere is an interesting take on the subject:
Even Further Progress On Poverty
By INVESTOR'S BUSINESS DAILY | Posted Tuesday, August 28, 2007 4:20 PM PT
Statistics: We've never been fond of the government's poverty data, believing they grossly overstate the problem. The latest data, however, show the poverty rate off sharply — which means it's even better than it looks.
It probably won't get much play (seeing that it happened on George Bush's watch), but it's worth noting nonetheless: The U.S. poverty rate dropped from 12.6% in 2005 to 12.3% in 2006. (The 12.3%, by the way, is below the 12.9% average under President Clinton, but you probably won't see that mentioned much either.)
Just two years ago, the media were full of stories about how poverty had risen in America despite a global economic boom. This, it was repeatedly suggested, showed that the U.S. suffered from gross economic inequality — capitalism's cardinal sin.
Which, of course, was utter nonsense. By any real measure, Americans — including the poor — are better off than the rest of the world. Moreover, the poverty data capture only one aspect of our economic existence: income. Study after study shows that Americans routinely consume well above their incomes, thanks in large part to government subsidies, aid, pensions and outright welfare.
Thus, when we say that someone is "poor," we have to define what that means. Technically, a person is poor if he or she had cash income in 2006 of less than $10,294; for a family of four, it was $20,614. Not much. But as we said, income isn't everything.
The problem begins when people confuse the government's official definition of "poverty" with "standard of living." It's the latter that matters, even for the so-called poor.
"Poor" households in America own an awful lot of stuff. Nearly 43% own their own homes, 73% own cars or trucks, 80% have air conditioning, 99% have refrigerators, 64% own washer, 57% own dryers, 97% have color TV sets (more than half have two), 78% own VCR or DVD players, and over a third have personal computers.
What's more, things have gotten better over time — regardless of what the poverty rate shows. In 1973, the year that official data show had the lowest poverty rate ever at 11.1%, one of every 12 low-income children was considered underweight; today, there are virtually no underweight children. Indeed, among rich and poor alike, obesity — a disease of affluence — is the bigger worry.
As for housing, in 1970 more than a quarter of poor households lived in "crowded" conditions (defined as more than one person per room). Today, it's below 6%.
OK, you say. But 47 million people don't have health insurance. Surely, they must be sicker than ever. Not quite. As demographer Nicholas Eberstadt of the American Enterprise Institute notes, the U.S. infant mortality rate has fallen 70% since the mid-1960s, and "children in poor families are more likely today to have an annual medical visit or checkup with a doctor than even non-poor children just 20 years ago."
For all Americans, access to medical care has steadily increased — whether they have insurance or not. (Incidentally, government data show 21% of all uninsured have incomes above $50,000, which is higher than the U.S. median of $48,000.)
In 1973, the poorest fifth of the population consumed roughly 40% more than they reported in income. In 2004, the percentage was 95%. In other words, a family of four reporting an income at the poverty threshold of $20,000 now consumes nearly $40,000.
How can you consume more than you earn? One way is to earn more than you report. In 2001 alone, the U.S. government estimated that $804 billion of personal income wasn't reported. And the poverty measure doesn't count EITC payments or non-cash welfare, such as food stamps and housing vouchers.
Yes, too many people are still poor. But the fact is, the gains that have been made are gigantic. If America's poor were to form their own country, they would be in the top 5% of the world's income distribution, according to World Bank data.
In short, America is a country of extraordinary abundance — no matter how you measure it.