Tom Sgouros: The Poor Are Still With Us
Monday, September 19, 2011
The Census Bureau has come out with a new report detailing the changes in poverty over the past decade. The nickel version: the poverty rate is at about 15.1% now, so one person in six is poor. This is roughly equal to previous peaks in 1993 and 1983. To find a rate significantly higher than we're at now, you have to go back to the early 1960s, before LBJ's "War on Poverty" commenced.
But there's detail here, and since there's little I like more than a good report with lots of graphs and tables, let's jump in. I also learned that 7% of all workers -- a quarter of whom worked full-time, year-round -- live below the poverty line.
Another important thing I learned is that the recent increase in poverty began a decade ago. Whatever economic "recovery" there was from the post-tech-bubble slump of ten years ago was no recovery at all at the bottom end of the income spectrum. In other words, you expect poverty to go up in a recession and down in a recovery. But since 2000, we've only seen it go up in the recessions, and down hardly at all in the recovery between them.
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The report this month is the latest in a 40 year series of annual reports about poverty in America. The level of poverty has been a political issue for much longer than that, and though the Census Bureau's efforts haven't really squelched the debate (as was hoped) they have changed the terms.
Some of the most recent controversy is that because lots of government programs give non-cash assistance to poor people, counting pre-tax cash income, as the Census does, isn't a good measure of poverty. In a way, this is quite true. Bill Clinton's welfare reform dramatically expanded the availability of child care by providing large subsidies directly to child care providers, instead of recipient families. If you're poor, you can also receive assistance with things like food, rent, and education.
The Census Bureau is currently researching new measures of poverty that will take into account these forms of assistance, and a report based on them is due out in in October. I doubt it will end the controversy, though.
The idea that poverty statistics are faulty because they don't count non-cash forms of assistance is one more of those beleaguered talking points beloved by those who want to deny the destructive effects on our nation of the dominant economic policies. So far as I can tell, the complaint stems from a 20-year-old report from the Heritage Foundation called "How 'Poor' Are America's Poor?" The report counted up the different forms of non-cash assistance, and concluded that poverty was a much overrated problem:
"'Poor' Americans today are better housed, better fed, and own more property than did the average U.S. citizen throughout much of the 20th Century. In 1988, the per capita expenditures of the lowest income fifth of the U.S. population exceeded the per capita expenditures of the median American household in 1955, after adjusting for inflation."
(The report uses quotation marks around the word poor all the way through. It also seems to have originated the complaint that if poor people have refrigerators and cars, they can't really be poor.)
Trying to correct
So is it true? Are our poor people pampered? The Census isn't the only source. The USDA reports that about 14.5% of households in America today are "food insecure" which means that they are not always able to get enough food for themselves or their families with the money and benefits they have. (It's 14.7% in Rhode Island.) That's in the same ballpark of the Census poverty rate, so it's hard to see how the Census numbers can be so terribly far off. My googling stumbled across a survey of Montana food-bank clients, which reported that 62.7% of the people who showed up for food aid had recently had to choose between food and heat for their homes, and 43.6% reported having to choose between food and medicine.
By the USDA's count, a bit more than half the people who are "food insecure" actually seek food aid. This roughly corresponds to the Montana survey, which estimates that many more people seek emergency food aid from shelters and food banks than from federal programs. Assuming the Montana figures are at all representative of the people who show up looking for emergency food aid elsewhere in the country, this is tens of millions of people who have to choose between food and medicine regularly. I'd say that's a pretty decent definition of "poor." (The ever-increasing demand at food pantries and homeless shelters around our state make a decent corroboration, too.)
What's more, any honest "correction" of poverty statistics is not only going to include the non-cash assistance received by the poor, but is also going to include the extra expenses borne by poor people, too: the high cost of housing, especially if you don't have enough for a security deposit; the all-too-frequent impossibility of commuting without a car; the extra cost of medical care for the uninsured; state and local taxes that fall disproportionately on poor people and so on. The question about how best to measure poverty is a complicated one, but the corrections necessary go both up and down.
The other thing you learn from the Census report is the stunning decline in poverty between 1959 and 1969, when the rate was cut in half. When public policy took poverty seriously, our nation made tremendous progress in reducing it. When it became fashionable to address the woes of rich people instead, it didn't. How about that?
Tom Sgouros is the editor of the Rhode Island Policy Reporter, at whatcheer.net and the author of "Ten Things You Don't Know About Rhode Island." Contact him at [email protected].
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