Understanding Poverty in America

What the Census Bureau doesn’t count when reporting on the “poor.”

By Robert Rector
Thursday, September 10, 2009

Today, the U.S. Census Bureau will release its annual poverty report. The report is expected to show an increase in poverty in 2008 due to the onset of the recession. It is no surprise that poverty goes up in a recession. What is surprising is that every year for nearly three decades, in good economic times and bad, Census has reported more than 30 million Americans living in poverty.

What does it mean to be “poor” in America? For the average reader, the word poverty implies significant physical hardship — for example, the lack of a warm, adequate home, nutritious food, or reasonable clothing for one’s children. By that measure, very few of the 30 million plus individuals defined as “living in poverty” by the government are actually poor. Real hardship does occur, but it is limited in scope and severity.

The average person identified as “poor” by the government has a living standard far higher than the public imagines. According to the government’s own surveys, the typical “poor” American has cable or satellite TV, two color TVs, and a DVD player or VCR. He has air conditioning, a car, a microwave, a refrig­erator, a stove, and a clothes washer and dryer. He is able to obtain medical care when needed. 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 affluent, it is far from the images of dire poverty conveyed by liberal activists and politicians.

Various government reports contain the following facts about persons defined as “poor” by the Census Bureau:

- Nearly 40 percent of all poor households actu­ally own their own homes. On average, this is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

- Eighty-four percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

- Nearly two-thirds of the poor have cable or satellite TV.

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

- The typical poor American has as much or more living space than the average individual living in most European countries. (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-eight percent of poor households have a color television; two-thirds own two or more color televisions.

- Eighty-two percent own microwave ovens; 67 percent have a DVD player; 73 percent have a VCR; 47 percent have a computer.

- The average intake of protein, vitamins, and minerals by poor children is indistinguishable from that of children in the upper middle class. Poor boys today at ages 18 and 19 are actually taller and heavier than middle-class boys of similar age were in the late 1950s. They are a full inch taller and ten pounds heavier than the GIs who stormed the beaches of Normandy during World War II.

Conventional accounts of poverty not only exaggerate hardship, they also underestimate government spending on the poor. In 2008, federal and state governments spent $714 billion (or 5 percent of the total economy) on means-tested welfare aid, providing cash, food, housing, medical care, and targeted social services to poor and low-income Americans. (This sum does not include Social Security or Medicare.) If converted into cash, this aid would be nearly four times the amount needed to eliminate poverty in the U.S. by raising the incomes of all poor households above the federal poverty levels.

How can the government spend so much and still have such high levels of apparent poverty? The answer is that, in measuring poverty and inequality, Census ignores almost the entire welfare state. Census deems a household poor if its income falls below federally specified levels. But in its regular measurements, Census counts only around 4 percent of total welfare spending as “income.” Because of this, government spending on the poor can expand almost infinitely without having any detectable impact on official poverty or inequality.

Also missing in most Washington discussions about the poor is an acknowledgement of the behavioral causes of official poverty. For example, families with children become poor primarily because of low levels of parental work and high levels of out-of-wedlock childbearing with accompanying single parenthood.

Even in the best economic times, the typical poor family with children has, on average, only 16 hours of work per week. Little work equals little income equals more poverty. Nearly two-thirds of poor children live in single-parent homes, a condition that has been promoted by the astonishing growth of out-of-wedlock childbearing in low-income communities. When the War on Poverty began, 7 percent of American children were born outside marriage; today the number is 39 percent.

President Obama is pursuing his agenda to “spread the wealth” through massive hikes in welfare spending financed by unprecedented increases in the federal debt. Before we further expand the welfare state and pile even greater indebtedness on our children, we need a more honest assessment of current anti-poverty spending and the actual living conditions of the “poor.”