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Our poverty statistics
According to the latest poverty rate estimates - released by the Census Bureau on Aug. 30 - the total percentage of Americans living in poverty was higher in 2004 (12.7 percent) than in 1974 (11.2 percent). According to that same report, poverty rates for American families and children were likewise higher last year than three decades earlier.
But can this be true?
Per capita income adjusted for inflation is over 60 percent higher today than in 1974. The unemployment rate is lower, and the percentage of adults with paying jobs is distinctly higher. Thirty years ago, the proportion of adults without a high school diploma was more than twice as high as today (39 percent versus 16 percent). And antipoverty spending is vastly higher today than in 1974, even after inflation adjustments...
The soundings from the poverty rate are further belied by information on actual living standards for low-income Americans. In 1972-73, for example, just 42 percent of the bottom fifth of American households owned a car; in 2003, almost three-quarters of "poverty households" had one. By 2001, only 6 percent of "poverty households" lived in "crowded" homes (more than one person per room) - down from 26 percent in 1970. By 2003, the fraction of poverty households with central air-conditioning (45 percent) was much higher than the 1980 level for the non-poor (29 percent).
Besides these living trends, there are what we might call the "dying trends": that is to say, America's health and mortality patterns. All strata of America - including the disadvantaged - are markedly healthier today than three decades ago. Though the officially calculated poverty rate for children was higher in 2004 than 1974 (17.8 percent versus 15.4 percent), the infant mortality rate - that most telling measure of wellbeing - fell by almost three-fifths over those same years, to 6.7 per 1,000 births from 16.7 per 1,000.
Here is the link. There are two bottom lines. First, we have made more progress against poverty than the numbers indicate. Second, we should look first to consumption data, not income data.
Posted by Tyler Cowen on September 10, 2005 at 04:50 AM in Data Source | Permalink
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Tyler Cowen has some comments and a link on poverty statistics that are worth reading over at Marginal Revolution.
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Comments
Well, it all depends on whether your definition of poverty is absolute, relative, or some combination of the two. Adopting an absolute definition of a poverty threshold makes no sense at all over a long enough period of time (we couldn't possibly use the 1855 standard now -- and eventually even the 1974 standard will seem absurd), but if the threshold is purely relative, the poverty rate is nothing other than a measure of inequality.
It occurs to me that it might be better if we simply designated the bottom 15 or 20 percent as 'the poor' by definition and then focused on measuring to what extent the lives of the poor were getting better or worse and in what ways.
Posted by: Slocum at Sep 10, 2005 7:53:02 AM
In 1974, homelessness was rare, now it's widespread. Many of the items that poor people need have risen in cost faster than inflation, particularly housing. Poor people also work more hours and have to travel farther to work than they did in 1974, both of which involve increased costs (like childcare) that aren't captured in poverty or consumer price statistics.
In some ways we've made progress on poverty, in some ways not so much.
Posted by: ns at Sep 10, 2005 11:34:54 AM
I believe the increase in homelessness, to the extent it actually exists, is largely due to state cutbacks in mental health services. The crazy and the dead drunk are no longer incarcerated in mass.
Posted by: Dylan at Sep 10, 2005 11:55:30 AM
but some of the difference between income and consumption measures could be attributed to debt, which has been rising, no?
Posted by: nick at Sep 10, 2005 12:33:40 PM
It's interesting to see the different reactions to stats like this. I've seen folks on the left look at these numbers and question the income distribution in the US, say that the US needs to find/develop a new industry(alternative energy?) now that the IT boom has run its course, criticize the Bush tax cuts, etc. The reaction from the right/libertarians seems to be uniformly(in response to these stats and, basically, any numbers that might hint that the average Joe isn't sharing in the benefits of free trade, productivity growth, etc) "things aren't bad, they're actually much better than they used to be".
Anecdotally speaking, I love being able to buy a $30 DVD player and $20 jeans at Old Navy but it seems like anything that the US can't outsource/offshore, prices are shooting out of control. Will housing, education, and health care ever stop increasing in price by over 10% a year?
Posted by: mjrmjr at Sep 10, 2005 1:08:42 PM
I think I see more homeless people in my area than I ever have before, but given that we have a few shelters nearby (official, semi-official, and blind-eye), there may be a magnet effect.
I would like to see how the numbers of homeless have changed, but in my ameteur web searches could not find good, national, data.
FWIW, I think we need to instituionalize people who genuinely need that kind of care. I think we (as a society) leave crazy people on the street more out of cowardice than commitment.
Posted by: odograph at Sep 10, 2005 2:10:00 PM
I think the institutionalizing issue comes down to money, plain and simple. How can you fund a mental hospital when Grover Norquist is drowning gov't in the bathtub?
Posted by: mjrmjr at Sep 10, 2005 3:39:11 PM
No one is drowning government in a bathtub. Its get bigger every year.
Posted by: Tim Fowler at Sep 10, 2005 5:10:46 PM
This is not wholly convincing. Per capita income is a mean, so increases may reflect increases at the high end. It does not tell us about the distribution of the increases. Similarly, the focus on employment statistics automatically ignores children living in poverty.
Nor do I accept the statements about consumption. The figures cited in the article are more than a little strange. Unless you can explain the $10,000/yr. excess of consumption over income I am unwilling to think that this is a meaningful number.
Finally, I find it odd that conservatives like Eberstadt, who generally are unwilling to consider infant mortality informative when American figures are compared to other countries', suddenly declare it a crucial indicator when it helps to push their agenda.
Posted by: Bernard Yomtov at Sep 10, 2005 5:14:19 PM
I think the institutionalizing issue comes down to money, plain and simple.
It does not come down just to that. Plenty of well-meaning people, especially liberals, were persuaded by the existence of well-documented abuses of involuntary institutionalization (including the difficulty of people getting out) that the process was essentially ended. Now, the savings in money certainly played a role for some, but it's quite wrong to insist that that was the only reason, "plain and simple."
I do agree that it seems like we've swung too far the other way in not helping people who really having problems, especially mental illness. However, it is very difficult to develop a system that institutionalizes people with mental illness who don't want to be locked up yet doesn't have the potential for abuse, causing people who are sane to be locked up against their will.
Posted by: John Thacker at Sep 10, 2005 6:11:06 PM
Hmm, the comments seem to be stripping tags. How annoying. Oh well.
There are comments about the price of housing for the poor increasing. While that's true, you can't ignore the facts presented in the article, like how the average amount of space per person (and the presence of air-conditioning, etc.) has increased for housing for the poor as well. If people are paying more but getting more, then it's complicated.
Posted by: John Thacker at Sep 10, 2005 6:15:14 PM
"Will housing, education, and health care ever stop increasing in price by over 10% a year?"
Not as long as the government continues to subsidize them, no. (Housing being a special case and quasi-exempt.)
Posted by: Dylan at Sep 10, 2005 6:58:04 PM
"Not as long as the government continues to subsidize them, no. "
Not to mention regulate the living crap out of them. Note that "the average amount of space per person (and the presence of air-conditioning, etc.) has increased for housing for the poor as well." Regulation plays a part in that; the poor (and middle class) are stuck buying bigger houses than they might otherwise choose because of housing regulations.
Inadequate policing of cheap neighborhoods also plays a role; this leads to a sort of arms race where people must squeeze out as much money for housing as they can, so as to minimize their chances of getting shot.
Health care is even more heavily regulated. The number of medical residents each year is set by Congress, not by anything remotely resembling a market. A staggering (and growing) web of regulation drives up costs and delays new treatments, all in the name of stopping us from hurting ourselves (suffering through lack of treatment apparently not being seen as quite as bad for some reason).
Posted by: Ken at Sep 10, 2005 8:55:06 PM
Bernard Yomtov wrote:
"Nor do I accept the statements about consumption. The figures cited in the article are more than a little strange. Unless you can explain the $10,000/yr. excess of consumption over income I am unwilling to think that this is a meaningful number."
Lots of people experience massive variability in income from year to year (small business owners, for instance). Yet they smooth their consumption, in much the same way that you probably only get paid once or twice a month, but spend money nearly every day. When such people have a down year, they appear as poor in the poverty statistics -- but they're still spending.
"Finally, I find it odd that conservatives like Eberstadt, who generally are unwilling to consider infant mortality informative when American figures are compared to other countries', suddenly declare it a crucial indicator when it helps to push their agenda."
There is substantial heterogeneity in definitions and data collection with regard to infant mortality across nations. A woman goes into premature labor at 21 weeks gestation and delivers a non-viable fetus: Is this infant mortality, or is it a miscarriage (and therefore not counted in infant mortality statistics)? Depends where you live. Moreover, infant mortality is strongly correlated with behavioral choices by the mother -- seeking prenatal care (free for all in the US, but not used by all), avoiding drugs, etc., and these choices do vary across nations. For these reasons, changes in infant mortality over time within a nation are usually more meaningful than cross-national comparisons.
Posted by: Don at Sep 11, 2005 8:49:29 AM
While we're on the general subject, could someone confirm to me that those poor black people that we've been seeing on the news programs in Louisiana and Mississippi, are the same ones who are meant to be enjoying a lifestyle equal to that of the average citizen in Sweden?
Posted by: dsquared at Sep 11, 2005 10:12:44 AM
If I recall, the statistic making the rounds a while ago was that per capita GDP in Mississippi was comparable to Sweden. This isn't the same thing that you claim above, dsquared. For one thing, the poor people we're seeing on news programs aren't average Mississippians, they're below average -- so comparing them to average Swedes isn't exactly cricket.
Moreover, per capita GDP and lifestyle aren't the same thing, and cross-country comparisons are particularly problematic.
You, of course, know all of this. It's a shame you prefer flinging these steaming piles of partisan excrement to engaging in honest, reasoned discourse.
Posted by: Don at Sep 11, 2005 12:55:30 PM
I'd like to see the definition of poverty based on a broad survey of the electorate done every few years. Ask specific questions about what type of housing, food, education, health, and mobility = poverty. The definition will be relative and change over time, but it's better than some arbitrary government bureaucracy definition. It means that when stats come out saying "X% live in poverty", we know that definition of poverty matches what our citizens think it does.
Posted by: Tory Gattis at Sep 11, 2005 2:08:24 PM
I am surprise with the statistics which is published i did'nt know America had such a high rate of poverty it is overwhelming to know,but i'm priviledge to know because it widens my knowledge on other country affairs as a university student.
Posted by: Christian at Nov 10, 2005 7:24:29 PM
I dont understand how there are such a vast majority of people going hungry in state.Why is it that there are people in america going hungry when we live in one of the richest countreis in the world.I am not to up on politics but,this much I do believe that the government on the state and federal side could and should do more to help these people help themselves.
Posted by: tammy at Nov 30, 2005 11:20:56 AM
I dont understand how there are such a vast majority of people going hungry in state.Why is it that there are people in america going hungry when we live in one of the richest countreis in the world.I am not to up on politics but,this much I do believe that the government on the state and federal side could and should do more to help these people help themselves.
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