How the Other Half Disappears
Understanding poverty statistics in America.
By Julie Fry, University of Chicago
Thursday June 1, 2006
Visiting the Center for American Progress last year, John Edwards told this story: “I met a woman in Kansas City with two kids who had a job that pays $9.50 an hour. She told me about winters where the choice was between lights and gas. She chooses the lights. She says to me, ‘When my kids go to bed, I tell them to wear as many clothes as they can. And when they go to school, I tell them not to tell anyone you don’t have gas because somebody might come and take you away. In America, nobody who works hard should live like that.’ She is absolutely right. The only thing necessary for the triumph of evil is for good men to do nothing. What that woman endures is evil.”
Let’s take a look at some basic facts about poverty in the US: Last year, the pre-tax-income cutoff for a couple with two children to be considered living in poverty was $19,806. According to data from the US Census Bureau, this means that there were 37 million Americans living in poverty in 2004—nearly one out of every eight people in the United States. In more human terms, 3.6 percent of American households faced food insecurity and hunger in 2004. Between 1999 and 2000, the number of Americans suffering from hunger increased to 2.8 million adults and over one million children.
Perhaps contrary to popular media stereotype, poverty is not just confined to inner-city ghettos: Only 40 percent of poor Americans live in central cities. The percentage of Americans in poverty living in suburbs is only slightly lower at 36 percent, but as a relatively new phenomenon it is growing quickly. Nearly 40 percent of America’s poor over the age of 16 worked either part- or full-time in 2001, yet could not earn enough money to live on.
That’s the bad news. The good news is that, ostensibly, ending poverty is relatively easy. The secret? Minor adjustments to the formula that determines who qualifies as living “in poverty.” Crunch a few numbers, raise a few cutoff points, and voila! The number of impoverished Americans has been cut by over a third. Quite the public policy miracle. It’s almost too good to be true. But don’t tell that to folks at the American Enterprise Institute, or the Heritage Foundation.
As I learned from these organizations, despite the seemingly dreary numbers, it turns out that poverty statistics are merely one more way to manipulate the government into giving money to the undeserving. “The poverty rate misleads the public and our representatives, and it thereby degrades the quality of our social policies,” writes Nicholas Eberstadt, of the American Enterprise Institute, “It should be discarded for the broken tool that it is.” The Heritage Foundation reminds us: “most of America’s ‘poor’ live in material conditions that would be judged as comfortable or well-off just a few generations ago.” Another report reveals a starker analysis: “There are two main reasons that American children are poor: Their parents don’t work much, and fathers are absent from the home.”
Is it really this simple? Could the war on poverty truly be won with minor adjustments to the calculations, which determine poverty thresholds? If we tinkered enough, could we really expose hundreds of thousands of lazy, relatively well-off Americans hiding under the skirts of the government?
Many conservatives criticize the formula used to determine poverty, which was developed back in the 1950’s and has undergone no major adjustments since that time. Organizations such as the Heritage Foundation decry setting thresholds for poverty using pre-tax income. Supposedly, this does not give enough weight to other “income” the poor can receive from anti-poverty programs, such as food stamps, housing subsidies, tax credits, and Medicaid (the benefits of which would put a large number of people marginally above what is currently considered the poverty level).
But in truth, it appears that the pendulum actually swings the other way. If anything, the current formula for determining who lives in poverty disguises the realities of life as a poor American, making millions of families invisible within the system. Even something as simple as the changing roles of women in society has made the current poverty formula obsolete. When the formula was developed, many mothers were not employed outside the home and cooked meals for their families. With most mothers now working full-time, food, child care and commuting eat up much more of a family budget than in the 1950’s, especially in single-parent households.
According to the Penn State authors of An Atlas of Poverty in America, official poverty guidelines continue to take into account that families spend about one-third of their income on food, but, in reality, food spending accounts for only one-sixth of their expenses. However, a much larger share of household expenses are being taken up by housing, utilities and transportation. When health care and childcare expenses are included in the poverty threshold calculations, (they currently are not) the minimum level of income for a family of four increases significantly.
Furthermore, the poverty thresholds are fixed across America, regardless of where a family lives. So, that $19,806 pre-tax income cutoff for a couple with two children hold true no matter where you live even though, as Jared Bernstein and Lawrence Mishel of the Economic Policy Institute note, average rent in Boston’s working-class neighborhoods is close to a thousand dollars a month. For a family of four living slightly above the poverty line, only six hundred and fifty dollars a month would remain for food, clothing, heat, and other expenses, leading to the conclusion that, in many cities, poverty thresholds ought to increase to up to twice the current number.
Another argument put forth by conservatives is that the “poor” are actually relatively well-off, when they are compared to those living in poverty in third-world countries, or even when compared to an American middle-class family in the 1950’s. Families in poverty today own color TVs, dishwashers, microwaves, even VCRs. The implication here is that families who can afford such “luxuries” have merely mismanaged their funds, and don’t really deserve the help of a government that aims to close the gap between those below and those above the poverty line.
However, to take the standards of living from over half a century ago and compare them to the situation of those in poverty today is highly misleading. In fact, it misses the point entirely. Families in poverty lack the basic support systems that middle and upper class Americans take for granted: health insurance, a savings account, even internet access.
One of the most important factors to look at when trying to pull families out of poverty permanently is their level of deprivation relative to the society in which they live. A color TV is small consolation to the generation of impoverished children who will grow up in an increasingly online world, which they lack the crucial skills to navigate. A dishwasher will do little to boost the chances of single parents in poverty, who lack the computers needed to bridge the technological divide that separates them from their middle-class peers. As Amartya Sen notes in The New Yorker, “being relatively poor in a rich country can be a great capability handicap, even when one’s absolute income is high in terms of world standards.”
Finally, we must put to rest the notion that the poor are poor because they simply do not work or don’t work enough: In the past 30 years, there has been an increase in jobs that fail to pay a living wage. Twenty-five percent of all jobs pay less than a poverty-level income. In some states, as many as thirty percent of available jobs do not pay a living wage, even when cost of living is adjusted for, across the states. This is to say nothing of the discrimination and preexisting disadvantages that stack the deck further against impoverished Americans seeking work.
John Edwards recently visited the University of Chicago campus to address the problem of poverty in America, which he has called “the moral issue of our time.” He noted that the involvement of college students had made a difference in the past, especially in the era of civil rights. “I think young people will embrace a moral cause. I think many of them are cynical about politics and they want something to believe in,” Edwards told the Washington Post in 2005. “My hope is to create a movement.”
Here is a chance to address the challenges of the 37 million Americans in poverty, as they themselves experience it. In America, no one should have to make the choices faced by the Kansas City woman who was forced to decide between lights and gas. John Edwards is just the most recent spokesperson for something we all know is true – nobody who works hard should have to live like that. We must work to create policies which take into account the changing needs of impoverished families relative to a changing society around them. This kind of big picture visionary policy work will make the difference, not shallow and misleading sleight of hand tricks designed to decrease the “official” number of Americans in poverty while ignoring the needs and realities of the 37 million Americans who need our help the most.
An earlier version of this article ran in Diskord, a Campus Progress sponsored publication.
Julie Fry is a third-year in at University of Chicago and the managing editor of Diskord, a journal of progressive thought at U of C. She is studying Political Science and International Relations. She is interested in issues of international development and is currently in Kenya studying the reintegration process of former child soldiers in sub-Saharan Africa.
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Comments
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This is a very informative article that I enjoyed reading. These are subjects that I would like to hear more and about and help change, it all rings home, because I grew up in poverty. Thank you for the hope and effort. Peace!
— Anastacia - Jun 10, 10:05 PM - #Thanks for writing this article. It’s such an incredibly important topic and you tackle some of the tough questions and problems.
Here in California our working families find it hard to get by, and the Federal Poverty Level does nothing to take into account the fact that our housing prices, transportation and overall cost-of-living is higher. A very informative study that came out a few weeks ago from the non-partisan group, the Public Policy Institute of California. The study can be found at: http://www.ppic.org/content/pubs/cacounts/CC_506DRCC.pdf. I suggest you check it out … it looks at the issue of the FPL’s inability to truly gauge the ability of families to be self-sufficient.
But though we find ourselves, at times, wondering how we can ever solve such a big probelm, there are indeed rays of light. I, too, saw Sen. Edwards speak on this topic, and he was beyond eloquent. The Mayor LA recenlty became the Chair of the Council of Mayors Taskforce on Poverty. And my state Senator, Sen. Richard Alarcón, is the Chair of the Select Committee to Develop a Master Plan to End Poverty in California. Along with a coalition of Legislators, he is working to tackle the problem and bring more families into self-sufficiency. (Note – I work for him on this project, so I’m not wholey unbaised!) You can find more information on this at: http://www.cadreamfoundation.org.
Ending poverty, or even simply reducing it, is going to take political will and a long term strategy. But this is something that we must do for our nation. It’s a travesty that working men and women are unable to provide the basic necessities – food, clothing, shelter, health care – for their children. We as a nation should be ashamed. And we as a nation need to come together to change this reality.
— Becca Doten, Los Angeles - Jun 13, 09:37 PM - #this is not suprising to me,te rich get richer and the poor get poorer.my dad has told me my whole life,and it is no less true today.histry shows us that the greed of the rich won,t stop untill the poor rise up and take them down.they also mask the situation buy calling the poor criminals,taking away there right to vote labeling some peoples actions or addictions as crimes when there are no victoms.lock them up and poof ,there not living in poverty,nor voting aginst the rich and there laws that keep them rich.
— tom andrews - Jun 14, 08:25 AM - #There’s only one way to fight poverty (unless you include NEVER voting for Republicans or “compassionate conservatives”—what a fraud!): The poverty level needs to be set according to the income levels of the wealthiest people in this country.
There are many ways this can be done, but here’s a fun plan: Rather than base Federal taxes on income, base it on the country’s needs. First, every year Congress and the Administration would get together and figure out how much they need to run the country well for the next year. Then, they determine which citizens have amassed what percentage of the total wealth of the country; e.g., 3% of our citizens control 90% of the wealth.
Next, the total of top people who have benefited the most from our economic system and accrued the aforementioned 90% of the wealth collectively will pay 19% of the amount determined by Congress and the Administration. After all, they’ve manipulated that system to their advantage, so it’s only fair they pay to keep it going.
Next, those who have amassed 80% of the wealth, collectively will pay 18%, the next ones who have amassed 70%, pay 17%, next 60% will pay 16% of the country’s needs and so on until you get to the lowest income citizens where 90% of them have amassed less than 10% of the total wealth of the country. Since our economic system has not benefited them much at all, collectively they would not have to pay anything.
Okay, okay, it’s pie-in-the-sky. Congress and the Administration are so corrupted they wouldn’t pass any kind of legislation that doesn’t benefit the wealthy at the expense of the middle and lower income earners, but why not dream big.
— Luckypuck - Jul 5, 04:11 PM - #