Importing Poverty

Washington Post: Importing Poverty Paul Samuelson

The standard story is that poverty is stuck; superficially, the statistics support that. The poverty rate measures the share of Americans below the official poverty line, which in 2006 was $20,614 for a four-person household. Last year, the poverty rate was 12.3 percent, down slightly from 12.6 percent in 2005 but higher than the recent low, 11.3 percent in 2000. It was also higher than the 11.8 percent average for the 1970s. So the conventional wisdom seems amply corroborated.

It isn't. Look again at the numbers. In 2006, there were 36.5 million people in poverty. That's the figure that translates into the 12.3 percent poverty rate. In 1990, the population was smaller, and there were 33.6 million people in poverty, a rate of 13.5 percent. The increase from 1990 to 2006 was 2.9 million people (36.5 million minus 33.6 million). Hispanics accounted for all of the gain.

Consider: From 1990 to 2006, the number of poor Hispanics increased 3.2 million, from 6 million to 9.2 million. Meanwhile, the number of non-Hispanic whites in poverty fell from 16.6 million (poverty rate: 8.8 percent) in 1990 to 16 million (8.2 percent) in 2006. Among blacks, there was a decline from 9.8 million in 1990 (poverty rate: 31.9 percent) to 9 million (24.3 percent) in 2006. White and black poverty has risen somewhat since 2000 but is down over longer periods.

..........

It's usually held that we've made little, if any, progress against poverty. That's simply untrue. Among non-Hispanic whites, the poverty rate may be approaching some irreducible minimum: people whose personal habits, poor skills, family relations or bad luck condemn them to a marginal existence. Among blacks, the poverty rate remains abysmally high, but it has dropped sharply since the 1980s. Moreover, taking into account federal benefits (food stamps, the earned-income tax credit) that aren't counted as cash income would further reduce reported poverty.

We shouldn't think that our massive efforts to mitigate poverty have had no effect. Immigration hides our grudging progress.

Comments

[Peter Kirk]

To put it another way, white Americans are maintaining their wealthy, or at least not poor, lifestyle by importing Hispanics to do the dirty and underpaid jobs for them.

[Michael W. Kruse]

Importing? Bad description of Samuelson's part. Last I checked millions of Mexicans a year cross into the US without being imported. Many pay “travel agents” to get them into the US. That is not importation.

Those dirty and underpaid American jobs are more appealing to them than their opportunities in Mexico. Why do you suppose that is?

[Dave Holtz-Oxley]

So the immigrants that have joined us without benefit of visa (II's for short) are numbered somewhere between 12 and 20 million, and only 3.2 million of them have been added to the ranks of the poor? Apparently a large number of them are living above that poverty line?

Another question I have would be this...... What is the poverty number for a household with 7-10 wage earners. That's the number of hispanics living in the house down the block. I would guess that splitting rent 8 ways for $1000/month probably doesn't require $20k per year.

Just a couple of thoughts.

[Michael W. Kruse]

"...only 3.2 million of them have been added to the ranks of the poor?"

At least the ones we know about.

I'm unclear in Samuelson's article if the poverty rate he refers to is always the household rate. The wording suggests that he could be moving back and forth between individual poverty and household poverty. If you have seven people each with poverty income living in one house they might not be a poverty "household" depending on how their counted. I don't know the answer here.

[Dave Holtz-Oxley]

Here is an article that seems to be addressing the same statistics that Samuelson refers to.

Response to poverty statistics

Some highlights(emphasis mine).....

Q: Is there any single reason why the “official poor” are poor?

A: If you look at the official poor, particularly at children who are officially in poverty, there are two main reasons for that. One is that their parents don’t work much. Typically in a year, poor families with children will have about 16 hours of adult work per week in the household. If you raised that so that you had just one adult working full time, 75 percent of those kids would immediately be raised out of poverty.

The second major reason that children are poor is a single parenthood in the absence of marriage. Close to two-thirds of all poor children live in single-parent families. What we find is that if a never-married mother married the father of her children, again, about 70 percent of them would immediately be raised out of poverty. Most of these men who are fathers without being married in fact have jobs and have a fairly good capacity to support a family.

Q: How many of those 37 million are children -- and why do they count them as poor people?

A: They are counted as part of the household -- what they judge is the whole household’s income. Part of the reason the Census Bureau is telling us that we have 37 million poor people is that it judges families to be poor if they have incomes roughly less than $20,000 a year. But it doesn’t count virtually any welfare income as income. So food stamps, public housing, Medicaid -- all of the $600 billion that we spend assisting poor people (per year) is not counted as income when they go to determine whether a family is poor.

Earlier in the article he states the interviewee states.....
Well, when John Edwards says that one in eight Americans do not have enough money for food, shelter or clothing, that’s generally what the average citizen is thinking about when they hear the word “poverty.” But if that’s what we mean by poverty, then virtually none of these 37 million people that are ostensibly poor are actually poor.

...what you find is that the overwhelming majority of them have cable television, have air conditioning, have microwaves, have two color TVs; 45 percent of them own their own homes, which are typically three-bedroom homes with 1{1/2} baths in very good recondition. On average, poor people who live in either apartments or in houses are not crowded and actually have more living space than the average person living in European countries, such as France, Italy or England.

I'd suggest reading the whole thing. But my point is that the person who reads multiple viewpoints from multiple authors can end up in a real quandary. To read the government statistics that 1 in 8 people in this country are living below the poverty line is an overwhelming and frightening thought.

Then the alternative viewpoint is that virtually nobody in the US goes hungry, and everyone who shows up at an emergency room has to get treatment regardless of ability to pay. This article makes some very logical points about many (not all by any means) of the causes of poverty are things that I personally call irresponsible behavior. The sign the guy on the street corner is holding doesn't even lie about being willing to work for food anymore.

Our government spends about 600 billion dollars a year to "fight" poverty. The math works out to about $16,000 per person including the kids. For whatever reason the numbers aren't changing rapidly.

At the family based homeless shelter that I serve at occasionally, the program is designed around educating parents about how to survive on their own. The system is designed to help the families break the cycle of poverty. From month to month the faces change. Most have completed that program and have been able to strike out on their own. A few can't deal with the concept that they are ultimately responsible to take care of themselves and their kids and return to the streets looking for handouts.

Work your tail off trying to help 36 million people, convince yourself that, "With the exception of a few mentally deficient people, poor people need to quit screwing up their own lives. And besides, giving an irresponsible person money so they can spend it irresponsibly isn't an answer to anything", or try to find a place in the middle?

[Michael W. Kruse]

Dave thanks for this link. I will link it later.

I read sometime back a study that monitored reported cash income and expenditures among the poor. Ten years ago expenditures exceeded by several percentage points. Those same studies now show expenditures amounting to nearly 200% of reported income. The poverty numbers don't count non-cash income and clearly the poor are getting greater benefit from this angle. Poverty measurement is a messy business and this article does a good job highlighting some of the textures.

Thanks for bringing it to my attention.