Defining Poverty

Professor Volokh tells us that the Los Angeles Times recently ran an editorial that claimed that "In our America, 60 million people survive on $7 a day." That's an astonishing number: he points out that this means 20% of the population is living on $2555 per year. The number isn't just astonishing, but wrong, based on misreading of a New York Times story about income reported to the IRS--and of course, excluding "the value of government benefits like food stamps, the earned-income tax credit for working families and subsidized medical care." And of course, a fair number of people--including poor people--work off the books, and so don't report all of their income.

Okay, no surprise: the Los Angeles Times is a bunch of liberal journalists who aren't very good at checking facts, and are so innumerate that they can't immediately spot something suspicious about this number.

More interesting is that one of the commenters pointed to this Heritage Foundation report that discusses the nature of poverty in America. There are two points that they are making, and depending on what emotional reaction to the concept of poverty that you bring to the table, you may react to one of their points, and miss the other. The first point:

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.

In short: there is serious suffering out there--but the government's definition of "poverty" includes a lot of people that aren't what most of us think of as "poor". The report points out that of the 37 million Americans considered "poor" by the government:

Forty-three percent of all poor households actu­ally own their own homes. The average home owned by persons 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....

Eighty percent of poor households have air conditioning....

Only 6 percent of poor households are over­crowded. More than two-thirds have more than two rooms per person....

The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)...

Nearly three-quarters of poor households own a car; 31 percent own two or more cars.

Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

The second point:

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.

For most of America's "poor," they are only poor by comparison to the rest of America. The report points out that not only by measures of material possessions, but also by measures of malnutrition, most of America's poor aren't particularly miserable:

While the poor are generally well nourished, some poor families do experience temporary food shortages. But even this condition is relatively rare; 89 percent of the poor report their families have "enough" food to eat, while only 2 percent say they "often" do not have enough to eat.

Overall, 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 next time that Senator Edwards gives his "two Americas" speech, keep this in mind.

I find myself wondering at times if the government's definition of poverty may be so expansive that resources and money have been diverted to people that are doing okay, and might be better spent on the desperately poor--the 2% that reported that they "often" did not have enough to eat, or that lacked shelter, or were unable to obtain medical care.