We hear a lot about poverty: who is poor, how poor they are, lack of opportunity, how our free-market economic system and the rich are to blame for their condition. In other words, it’s our fault they are poor.
What image comes to mind when you hear the word poverty? Someone who looks like a bum, homeless, unkempt and lazy, living off the taxpayers? Or a simple, hardworking individual or family, struggling to make ends meet, just trying to get along?
Or, all of the above?
Poverty statistics have always troubled me. Mostly, I think, because they seem to include too large a percentage of the population, and the percentage never seems to change. If anything, it has increased over the years. My sense is that the reason for this is that the definition of poverty keeps changing, generally to bolster the bureaucracy and special interests that have turned it into a business.
The War on Poverty was launched by President Lyndon Johnson in 1964, and “in the decade following the 1964 introduction of the War on Poverty, poverty rates in the United States dropped to their lowest level to date: 11.1 percent. They have remained between 11 and 15.2 percent ever since. Since 1973, poverty has remained well below the historical U.S. averages in the range of 20 percent to 25 percent. … In 2004, more than 35.9 million, or 12 percent of Americans, including 12.1 million children, were considered to be living in poverty with an average growth of almost 1 million per year,” according to Wikipedia.
The word “poor” is misleading. It tends to imply that people who are considered poor are unemployed, living on the streets, going hungry. However, the reality is far different from the popular image.
Robert Rector, a senior research fellow with the Heritage Foundation, provides interesting and perhaps surprising insight on the status of the poor in his article “Understanding Poverty in America, What the Census Bureau Doesn’t Count when Reporting on the ‘Poor.’”
Rector notes, for example, that very few of the more than 30 million Americans who are defined as poor actually experience any significant hardship. “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.”
Rector also observes that spending on the poor is generally underestimated — by not including the value of many of the government benefits they receive, such as food, housing, medical care and certain social services. “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,” he writes.
He further comments, “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.”
How is it possible that the number of Americans living in poverty never changes, no matter how much money and services are provided to help them?
The answer is that the definition of poverty — that is, the formula for calculating income — routinely omits many of the government services and benefits provided to the poor. For example, census figures count only “around 4 percent of total (government) welfare spending as ‘income.’” This makes it possible to increase expenditures for welfare without materially affecting the poverty numbers.
Poverty in America has become a growth industry, with a variety of constituencies and special interests, including many politicians, all of whom benefit from the system and seek to expand it for their own advantage.
— Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who has lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his blog, Opinionfest.com.